ACTION LINE: How does Hill’s Exchange Express set gas prices?

ACTION LINE: How does Hill’s Exchange Express set gas prices?

Q: I am writing this concerning the gasoline prices at the Base Exchange (BX). I perceive a pattern of raising prices just prior to paydays. Last Wednesday before the civilian payday, while the media are announcing lower oil prices, gas at the BX rose 16 cents a gallon (mid-grade) between 2:30 p.m. and 12:30 a.m. I do not believe there was a new delivery that late in the day. At every other base I have been, the prices are lower than the local prices except Hill. It doesn’t seem right. Our military should be getting a break.

A: Thank you for giving us this opportunity to explain our gas pricing. Exchange Express locations rely on a survey process to ensure prices are competitive with the local community. Specifically, the Hill Exchange conducts three daily surveys of five local gas stations. Pump prices are then set equal to the lowest price surveyed for each grade of fuel. Because market-based pricing is not contingent on cost, the Exchange surveys and changes prices as frequently as necessary to remain competitive. This sometimes means we sell gasoline below cost. 

In addition, while the Exchange, which is part of the Department of Defense, 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). The Exchange, and by extension its customers, pays federal tax pursuant to the U.S. code that covers federal tax on gasoline (26 U.S.C. § 4081(a)). Accordingly, Exchange pump prices include state, federal, and local motor fuel taxes, as well as underground storage fees and other applicable fees, which are included in the price and paid to the appropriate taxing authority. 

With that said, the Exchange is doing everything within its power to deliver the best value possible to drivers at Hill AFB.

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