Army Air Force Exchange Service Aka AAFES

Army Air Force Exchange Service Aka AAFES

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Published: 25 September 2020

Posted by: Anonymous

This is reference to AAFES Fuel program and its pricing for customers in Germany. It is based on the Dept of Energy’s national average retail price of gasoline. I have seen contradictory comments made from various AAFES sources, most notably by the AAFES commander. The commander stated that we are getting a break in Germany because we don’t have to pay around $4 per gallon as is the case on the local economy. This is not a satisfactory observation. At the end of Jul 03, the average cost (without fed or state taxes)of gas in the US was $1.30. The average cost of gas in Germany and France for the same period was $1.31 and .80 respectively. AAFES does not pay taxes on fuel. AAFES customers are not receiving clear answers on this issue. The basic question: what is the cost of AAFES gas, and what accounts for the others costs that total to the selling price of gas to the AAFES customer? AAFES response: is that their overseas gas prices are based on the U.S. Department of Energy’s (DoE) monthly average for each grade of gasoline in CONUS. These costs include labor, costs related to fuel coupons, such as printing, accounting, warehousing, selling, and redemption, depreciation and other expenses. Dispensing costs are reviewed and updated annually. AAFES continued by stating that a spot survey of gas stations on the economy in Germany in early September showed the price for a gallon of unleaded gas in Germany averaged $4.17 a gallon. The AAFES price for unleaded gas in Germany was $1.791 at that same time. AAFES merchandise prices, which include gas, are proprietary in nature as is common with other retailers. My Counter Response to AAFES: The point of my inquiry is that the average cost of gasoline without Federal or State taxes is less than sale price- $1.30 versus $1.70. AAFES is not subject to paying these taxes. At the end of July, the average cost of gas in the US, Germany and France was $1.30, $1.31 and $0.80 per gallon, respectively. I was not implying that AAFES should sell at cost, but rather what is the cost of gasoline to AAFES. I cannot understand what relationship German gasoline retail pricing has with AAFES retail pricing. Taxes imposed on German consumers are significant and are a source of revenue to support the German infrastructure for distinct and specific benefits unique to German citizens. In the Exxon web-site, there is a percentage breakdown of the price of gasoline from production to delivery to the consumer. Exxon is a distinctly separate enterprise than AAFES in that they produce and sell petroleum products. AAFES utilizes an existing retail infrastructure in Germany. I believe this arrangement has minimal burden on the German retail infrastructure. The German retailers must only account for and process the Gas coupons for reimbursement. Consumers using AAFES fuel coupons represent an additional source of revenue to German retailers. With regard to the “proprietary nature” of AAFES pricing, I thought that AAFES was a Government enterprise that was subject to public scrutiny. I did not realize AAFES financial data was proprietary as is common with private enterprises. The bottom line is that I thought AAFES is a public enterprise and I believe they should disclose financial data. I would like to see a report on revenue from gasoline sales and costs associated with those sales. AAFES claims that they support MWR and other activities with their earnings-I’d like to see complete documentation. I know that AAFES is supported in part with public funds and I believe that they should be made accountable for their expenditures and disclose their lethodology to price products. Pete APO AEGermany

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