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News > Scott’s shoppette drives for value at the pump
Scott’s shoppette drives for value at the pump

Posted 4/13/2011   Updated 4/13/2011 Email story   Print story


by Army & Air Force Exchange Service Corporate Communications

4/13/2011 - SCOTT AIR FORCE BASE, Ill.  -- A recent Chicago Sun Times article quoted oil industry experts predicting that gas prices could hit $5 a gallon, possibly in the next few months. This potentially large spike in gas prices has Exchange officials reaching to ensure drivers are aware of the procedures in place to determine pump prices at Scott as well as the benefits available to authorized patrons.

While overall energy prices are beyond the Army and Air Force Exchange Service's control, the Military Star Card, for example, can help curb added expenses and, in turn, save Airmen 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 Lawrence E. Simmons, Jr. "Because the Military Star Card is administered by the Exchange Credit Program, our Shoppette 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 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, the Scott Shoppette, now referred to as the Express, will periodically offer steeper discounts during certain holidays.

Beyond exclusive discounts, the Exchange Express relies on a survey process to ensure prices are fair and competitive with the local community.

Specifically, the Express conducts multiple surveys each day at a minimum of five locations selling motor fuel, deemed by the local GM 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," said Simmons. "In fact, even though the Express charges sales tax on gasoline, the surveys can result in prices that are actually even below cost."

While it is true that the Exchange, 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). Charging sales tax can be like pulling the emergency brake on shoppers used to the tax-free benefit that the Exchange provides on almost everything, except gas. But the Exchange, and by extension its customers, is required to pay federal tax pursuant the U.S. code that covers Federal Tax on gasoline (26 U.S.C. § 4081(a)).

Accordingly, the Exchange 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. Simmons. "With that said, we remain focused on delivering the best value possible to drivers at Scott."

The Army and Air Force Exchange Service is a joint command and is directed by a board of directors which is responsible to the secretaries of the Army and the Air Force through the service chiefs of staff.

The Exchange has the dual mission of providing authorized patrons with articles of merchandise and services and generating non-appropriated fund earnings as a supplemental source of funding for military Morale, Welfare and Recreation programs.

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