Record high prices at military gas pumps in mainland Japan and Okinawa likely won’t budge until at least December.
Officials with the Defense Energy Support Center wrote in an e-mail Saturday to Stars and Stripes that the Office of Secretary of Defense will review its composite price of $170.94 a barrel in November, when the president’s "economic assumptions" for fiscal 2010 are expected to be released.
"Defense expects to reprice fuel on December 1, 2008," stated DESC spokeswoman Kelly Widener.
"Because fuel futures are prices for future month deliveries, DESC sees the effect of future price changes six to eight weeks after the futures price change," Widener said. "This works both up and down."
DESC officials say the standard price of fuel is a tool to insulate the military from the normal ups and downs of the marketplace.
But that standard price over the last two months or so has kept retail fuel prices in mainland Japan and Okinawa over $4 a gallon while gas prices tumble stateside.
Last week, midgrade gasoline in the States averaged $3.29 a gallon, while in mainland Japan and Okinawa it currently retails for $4.06 a gallon at most U.S. military bases. Marine Corps Air Station Iwakuni is the exception: midgrade there is $4.53 a gallon.
Gas sold at military bases in mainland Japan and Okinawa is purchased through DESC.
DESC purchases commercial grades of fuel under its Japan Posts, Camps and Stations Program, supported competitively by vendors Showa Shell, Cosmo Oil Corporation, ExxonMobil and Nippon Oil Corporation, according to Widener.
Currently, DESC pays a range of $2.4716 to $4.7789 a gallon for midgrade gas in Japan, with prices generally higher for more isolated areas, Widener said.
Since July, military services and the Army and Air Force Exchange Service have been paying $4.19 a gallon for midgrade fuel from DESC. And it’s that expense that’s keeping retail gas prices in Japan higher than in the States, AAFES, Navy Exchange and Marine Corps Community Services officials have said.
NEX in Japan maintains the same fuel prices as AAFES, while MCCS has its own pricing policy.
At the start of the current fiscal year, OSD opted to maintain the DESC standard price of $170.94 per barrel, a level consistent with short-term government energy forecasts, Widener said.
