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Motorists in mainland Japan and Okinawa are saving a few dimes at Army and Air Force Exchange Service pumps.

On Monday, AAFES dropped midgrade gas 11 cents to $2.19 a gallon — an unexpected savings fueled by cheaper wholesale costs.

AAFES officials on Okinawa said the Defense Energy Support Center, the company’s supplier in mainland Japan and Okinawa, lowered its cost from $2.20 to $2.06 a gallon.

“We didn’t have any warning that it was going to drop,” said Sgt. 1st Class Amanda Glenn, an AAFES spokeswoman. She said the new retail price was effective Monday.

At the beginning of this month, AAFES announced the price of its midgrade fuel in Japan and Okinawa would hold steady from the previous month at $2.304 a gallon.

AAFES has an annual contract with DESC for the fiscal year, meaning its purchase price for motor gas typically doesn’t change until Oct. 1 of each year. But in a memorandum dated Jan. 13 and posted on the DESC’s Web site, the Pentagon announced the mid-fiscal year adjustment. Recent decreases in world fuel prices, revised fuel projections from the Office of Management and Budget for the remainder of fiscal 2006, and an increase in the fuel supplemental funding provided in the fiscal 2006 Defense Department Appropriations Act has “allowed the lowering of [fiscal 2006] fuel pricing to the Services,” the document states. The change was effective Feb. 1.

The new AAFES pump prices will remain in place until market prices are adjusted based on the U.S. Department of Energy’s monthly average, said Master Sgt. Donovan Potter, an AAFES spokesman on Okinawa, in a written reply to a query. The Energy Department’s mid- grade fuel average in January was $2.38. AAFES takes the previous four-week average plus local dispensing costs to set its retail price at the start of each month.

On mainland Japan and Okinawa, government of Japan funds are used to discount fuel. At one point last year, that discount was 25 cents a gallon.

AAFES officials said that Japan and Okinawa are the only markets in the Pacific theater impacted by the DESC adjustment. In South Korea and Guam, AAFES purchases motor gasoline from local suppliers. AAFES currently sells regular unleaded gas in Guam for $2.379 a gallon, and in South Korea for $2.345 a gallon.

As of last Friday, the price for gas at Navy Exchange outlets in Japan was at $2.30 per gallon, said a NEX command spokesperson. “Traditionally, NEXCOM stays competitive with AAFES prices, and it is expected that NEX will follow suit and drop its prices,” the spokesperson said.

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