MISAWA AIR BASE, Japan — The $2.03-per-gallon honeymoon is over: AAFES announced Monday it would raise the price tag on midgrade gasoline in mainland Japan and on Okinawa by 47 cents Tuesday to compensate for rising wholesale costs.
On Oct. 1, the Defense Energy Support Center raised the price the Army and Air Force Exchange Service pays for gas in mainland Japan and Okinawa from $1.79 to $2.20 per gallon, AAFES officials said Monday in a news release.
Last week, AAFES officials said they were unsure when they would adjust prices since they were waiting for the new fiscal 2006 contract with DESC, which in Japan is based at Yokota Air Base near Tokyo.
After receiving notification of the new contract over the weekend, theyset the price increase for Tuesday, said AAFES Pacific spokeswoman Sgt. 1st Class Amanda Glenn, noting AAFES asked American Forces Network radio and television to broadcast the information throughout the day Monday.
“Since our cost for fuel increased, we were forced to raise the price at the pumps,” said Master Sgt. Donovan Potter, AAFES Pacific spokesman.
On Tuesday, midgrade gas at AAFES fuel stations was to climb to $2.50 a gallon, and diesel was to increase from $2.05 to $2.528 a gallon.
Prices also were expected to increase at Navy Exchange service stations on mainland Japan, since NEX in Japan pays the same wholesale price as AAFES.
“They’re under review,” said Jerry McMahan, NEX services manager at Yokosuka Naval Base, Japan, on Monday. “I haven’t heard anything from NEX (Service Command) yet on the new retail price. They will be changing. To what? I don’t know. It won’t be tomorrow. It will be later in the week.” NEX in Japan currently sells mid- grade fuel for $2.09 a gallon.
AAFES officials said their new retail prices in Japan allow for a 13.9 percent profit margin.
“Recent discussions between AAFES and U.S. Forces Japan resulted in AAFES holding profits at 13.9 percent until the gas pricing policy is discussed again some time in November,” AAFES officials were quoted as saying in a news release.
The gas-pricing policy is expected to be reviewed again in November, when the AAFES board of directors is expected to meet, AAFES officials said.
Midgrade gas prices could have climbed to at least $2.689 a gallon in mainland Japan and on Okinawa, had the pre-Hurricane Katrina four-week Department of Energy average been used to determine AAFES fuel prices, as it is at its other overseas outlets.
“The new price of $2.50 still saves our customers 18.9 cents on every gallon,” AAFES officials stated in the news release.
But to customers accustomed to paying $2.03 a gallon — the price AAFES has charged for its midgrade gas in mainland Japan and Okinawa since June — $2.50 seems high. AAFES should have given more warning, some motorists said Monday.
Keith Williams, the supervisor of outpatient medical records at U.S. Naval Hospital Okinawa, was shocked to learn gas prices were jumping to $2.50 for midgrade.
“They should give us some warning,” Williams said. “They’ve got AFN [and numerous newspapers], if they anticipate this significant of an increase, they have a lot of ways to put the word out to the public. I expected [an increase], but I also expected at least some warning.”
Williams said AAFES charging $2.50 for a gallon of midgrade fuel doesn’t make sense if they’re paying only $2.20.
While Williams acknowledged the price is still better than what folks in the States are paying, he said he’s concerned about the junior enlisted troops.
“It doesn’t seem like that much … but $10 a week to an E-3 that drives a car is a lot,” he said.
Seaman Megan Oliver, a corpsman at the hospital, said the increase is going to hit her pocketbook hard. She said she fills up her tank about once a week to the tune of $25. Now that weekly visit to the pump will probably cost her more than $30.
“I don’t make enough money,” she said. “I just won’t be driving as much … and maybe I’ll try to carpool.”
Like Oliver, Misawa Air Base, Japan, contractor Mike Mann figured his next trip would cost him more than $30. On Monday, he paid $26 to fill up his Hilux Surf truck.
“To me, it’s a lot. You don’t go anywhere without gas,” he said.
Airman 1st Class Christian Edwards said he was taking the increase in stride.
“It doesn’t bother me,” he said. “I always set aside money for gas. But it is kind of high.”
In South Korea and Guam, motorists are paying $2.597 and $2.669, respectively, for unleaded gas in October. Their retail prices are still based on DOE averages; for October, AAFES is using pre-Hurricane Katrina figures.
Fred Zimmerman contributed to this story.
The difference a day makes
AAFES per gallon cost of midgrade gas:
$2.03 on Monday$2.50 on TuesdayAAFES per gallon cost of diesel:
$2.05 on Monday$2.528 on TuesdayNavy officials expect NEX pump prices to rise sometime later this week from $2.09 a gallon for midgrade gas to a yet-unspecified price.
