CAMP FOSTER, Okinawa — Gas prices for the U.S. military community overseas are falling in South Korea and Guam but not in mainland Japan or Okinawa.
Prices throughout the region, however, remain well above the Department of Energy’s stateside average of $3.809 per gallon.
While the price of unleaded gas will drop at all Army and Air Force Exchange Service stations on Guam and in South Korea on Saturday, the cost for midgrade unleaded in Japan will remain at $4.063, AAFES said Thursday.
And motorists in Japan can expect the cost to remain unchanged until at least October, said AAFES spokesman Master Sgt. Donovan Potter.
"We’re buying gas now at $4.19 per gallon in Japan," Potter said. "And we’re not going to get any relief until at least the first of October. We can’t sell for less than what we pay for it."
And no relief is expected at NEX pumps. The Navy Exchange in Japan has a policy to follow AAFES gas pricing. Drivers filled their tanks for $4.06 per gallon Thursday at Yokosuka Naval Base’s Navy Exchange Autoport.
Although AAFES says it sets its retail gas prices on a formula based on the DOE’s national average, costs for regular in the Pacific range from 10 to 26 cents higher than the $3.809 per gallon average in the States.
But it could be worse. Japan subsidizes the cost of gas on U.S. bases by 25 cents per gallon. So, subtract 25 cents from the $4.19 cost and then add the cost for dispensing the product, and the price comes to $4.063 per gallon, Potter said.
Wholesale costs do not enter into the formula, unless it costs AAFES more to buy and provide gas overseas than it does to do so in the States, according to Potter. When that occurs, the prices at the pump revert to what AAFES calls "floor pricing," or wholesale plus dispensing costs.
Such floor pricing last kicked in in December, and remained higher than stateside prices.
John Roth, deputy comptroller for the Department of Defense, issued a memorandum in June explaining why the Defense Energy Support Center raised its fuel prices.
"The continued volatility of world fuel prices, and the resulting impact on the Defense Logistics Agency, necessitates a fuel price increase in order to ensure the continued solvency of the Defense-Wide Working Capital Fund," he stated in the memo.
The readjustment set the DESC price for a gallon of midgrade gasoline at $4.19. The cost for regular was set at $3.98 per gallon and premium was capped at $4.71 per gallon. The prices are set through Sept. 30.
The cost for a gallon of unleaded gas on Guam and South Korea will drop 7 to 8 cents Saturday. Diesel in South Korea and Japan will fall 14.9 cents.
Potter explained that gas prices for South Korea dropped because AAFES buys fuel from a different distributor, SK Energy Co.
"We are still able to use the national U.S. Department of Energy average from the previous week to set the price over there, since our wholesale cost is not as high as it is in Japan and Okinawa," Potter said.
"They obviously do not have a 25-cent government-of-Japan offset in Korea.
"AAFES understands the frustration motorists feel as they see the price of midgrade unleaded gas falling in the United States without getting a break at the pumps out here," Potter said. "We hope to see a reduction in our wholesale price soon, so we can pass along the savings to our valued customers."