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Over the last 11 weeks, the price of regular gas at the Army and Air Force Exchange Service has been slashed in half, falling from $4.04 to $2.02 a gallon. And if that’s not incentive enough to hit the road, prices will fall again Saturday, bringing regular gas in Germany down 8.5 cents to $1.935 a gallon.

That’s the cheapest it’s been since April 2004.

While AAFES prices are still falling, they aren’t keeping up with toppling prices in the U.S., where gas has gotten cheaper every day for the past 85 days, according to AAA data.

The price AAFES pays for its gas has apparently not fallen as quickly, triggering "floor" pricing, under which the exchange sells fuel at or near cost, for nearly all grades of fuel in all European locales. Only midgrade gas in Germany keeps pace with the U.S.

Floor pricing prevents the exchange from losing money on gas sales, but also prevents customers from seeing the savings afforded their stateside counterparts.

So while the average cost of a gallon of premium gas in the U.S. fell 11.2 cents a gallon in the past week, the price AAFES customers pay falls just 6.6 cents a gallon in Germany, 6.9 cents in the Netherlands and .2 cents a gallon in the United Kingdom.

Still, prices are at multiyear lows. It has been more than 2½ years since AAFES regular gas cost less than $2 a gallon.

Key to driving prices down is the slowdown of the global economy. According to a monthly U.S. Energy Information Administration report released Tuesday, the economic downturn is projected to be longer and more severe than had been forecast.

Its outlook dimmed, the EIA is now projecting the price of regular gas in the U.S. will average $2.03 a gallon in 2009. So far in 2008, the price of regular gas has averaged $3.34, according to EIA data.


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