Malmstrom service station provides value at the pump

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MALMSTROM AIR FORCE BASE, Mont. --  Forecasts of increasing energy prices has exchange officials reaching out to drivers to ensure they are aware of the procedures in place to determine pump prices here, as well as the benefits available to authorized exchange patrons.

While overall energy prices are beyond the Army and Air Force Exchange Service's control, their Military Star® Card, for example, can help curb added expenses and, in turn, save Air Force Global Strike Command Airmen stationed here money when filling up.

"Anytime a customer uses a bank issued debit or credit card, the retailer pays a portion of the transaction to a third-party financial institution," said the Exchange's General Manager Mark Downs. "Because the Military Star® Card is administered by the Exchange Credit Program, our gas station is not subject to the additional fees incurred through other 'pay at the pump' options. As a result, we're able to pass savings on to authorized exchange shoppers by taking a nickel off each gallon dispensed."

In addition to the five cents a gallon savings Military Star® Card holders enjoy every day, Malmstrom gas station periodically also offer steeper discounts, up to 20 cents a gallon.

Drivers interested in learning more about the Military Star® Card fuel discount can visit the Exchange gas station or Main Store log on to www.aafes.com and click the Military Star® Card icon for additional details.

Beyond exclusive discounts, AAFES gas stations rely on a survey process to ensure prices are fair and competitive with the local community.

Specifically, AAFES conducts daily surveys of at least five locations selling motor fuel, deemed by the local general manager to be the competition. Pump prices are then set equal to the lowest price surveyed for each grade of fuel available.

"Because market-based pricing is not contingent on cost, we survey and change prices as frequently as necessary to remain competitive," Mr. Downs said. "In fact, even though AAFES is responsible for charging sales tax on gasoline, the surveys can result in prices that are actually even below cost."

Charging sales tax on fuel can raise the eyebrows of shoppers used to the tax-free benefit that the exchange provides on almost everything, except gas.

While it is true that AAFES, as a U.S. government instrumentality, is immune from state and local taxes, the immunity specific to fuel has been waived by Congress (Hayden Cartwright Act, 4 U.S.C. 104). AAFES, and by extension its customers, also pay federal tax pursuant the U.S. code that covers federal tax on gasoline (26 U.S.C. § 4081(a)).

Accordingly, AAFES pump prices include state, federal and local motor fuel taxes, as well as underground storage fees, etc. The federal and state taxes, as well as, other applicable fees are included in the price and paid to the appropriate taxing authority.

"Gas pricing is a very complex issue, impacted by world markets, political and economic factors," said Mr. Downs. "With that said, we remain focused on delivering the best value possible to drivers at Malmstrom."