Weak dollar has cost of gas rising for troops in Italy
July 25, 2007
European edition, Wednesday, July 25, 2007
A week after learning they will be losing money in their cost-of-living allowance, troops in Italy received more bad news: Gas prices are going up 15 cents a gallon.
Prices for discount fuel in Italy will hit an all-time high in August, topping the $90 mark for a 100-liter booklet of unleaded gasoline coupons.
When coupon booklets go on sale Aug. 1, the price for a 100-liter booklet of unleaded gasoline will be $92, while a 100-liter booklet of diesel will go for $87, said Bart Di Muccio, manager of the Tax-Free Office in Naples, which administers the Navy-run program in Italy. Both prices are a $4 increase from July prices.
The booklet prices translate to $3.496 a gallon for unleaded and $3.306 a gallon for diesel.
But unlike the COLA decrease — blamed on the results of a recent living pattern survey — the climbing gas prices are a direct result of the declining dollar.
“The main reason for the price increase is the weak dollar against the euro,” Di Muccio said. “That, and there was a slight increase in the actual cost of crude oil.”
Each month, Di Muccio’s office sets prices for fuel coupons bought by U.S. and NATO members serving in Italy by calculating changes in the barrel price of fuel, fluctuations in the exchange rate between the U.S. dollar and the euro, and any gains or losses the Navy Exchange and the Army and Air Force Exchange Service incurred in the previous month’s sales, Di Muccio said.
The tax-free office does not take into account that members already are being hit in the pocketbook by the weak dollar-to-euro rates.
“We have to pay the invoices every 15 days, and we can’t ask the distributors to hold off collecting for a few months while we hope the dollar gets stronger,” Di Muccio said.
News of the increase upset Staff Sgt. Linda Toth, a Hungarian soldier assigned to Joint Force Command Naples in Bagnoli.
“I think they should do whatever they can to try to keep the prices down,” said the 24-year-old soldier. “This is going to be hard on me. … Unfortunately, the mass transportation system here is not very good, and I’ll need to use my car as I did before the price increase.”
Staff Sgt. Jennifer Jackson said the price of gasoline has her driving less.
“I try to get 300 liters and make that last me two months,” she said, adding that she lives only a short drive from Aviano Air Base. “That’s one of the reasons I picked [the location], because of the price of gas.”
She said she had recently been in New York and saw the price of a gallon top $2.92, though she realizes it’s more expensive in other parts of the States. She said even though it would cost her $12 more to buy the maximum amount of gasoline she could in August, those kind of purchases add up.
With the increase, prices in Italy are now more than 25 cents a gallon higher than prices at AAFES stations. The price of a gallon of unleaded fuel in Germany is $3.216. The price for super unleaded in the United Kingdom was $3.248. The price for super unleaded in the Netherlands was $3.499, and price for super plus in the Azores was $3.350.
AAFES changes its prices on a weekly basis, while in Italy, prices, if they change, are done at the beginning of each month.
Americans and NATO personnel stationed at military bases in Italy don’t have access to on-base stations, and instead redeem the coupons for fuel at participating Esso or Agip stations.
Stars and Stripes reporter Kent Harris contributed to this report.