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LPG prices to rise on Saipan
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Posted on Jun 06 2008
The price of liquid petroleum fuel is poised to rise on Monday, a hike that threatens to place added financial strain on the island’s restaurants.
In an exclusive interview Friday, Dionisio Lopez, chairman of Saipan Industrial Gas, revealed the cost of liquid petroleum gas is set to rise significantly for individual customers, while hotels and other large consumers will receive a 15-day notice of the increase.
A common source of fuel for cooking, liquid petroleum gas is a byproduct of oil refining and Lopez said the increase is largely due to higher oil prices in the global market. However, he noted that despite the added cost of transporting fuel to the island, the prices on Saipan are still lower than they are on Guam.
“The prices, yes, are going to go up,” he said. But “with all the other expenses, the price on Saipan—I don’t know why—is cheaper than on Guam,” Lopez said.
According to Lopez, the price of 20-lb gas tanks—often used in household cooking—will rise by $1.50 to $30.50. Larger 40-lb tanks will increase in price by $2.50 to $59.50, while the cost of 90-lb tanks—found in many of Saipan’s restaurants—will go up by $5 to $118.
Lopez’s primary competitor on Saipan, Wushin Corporation, has yet to announce whether its prices will also rise. A source with the company said no update is currently available.
Despite seeing lower costs for the gas than their counterparts on Guam, restaurateurs on Saipan say the price hike will only compound the economic hardships they face in light of rising electricity costs and the recent increase in the local minimum wage. Ultimately, they said, customers may have to absorb the added costs through higher prices.
Annie Hayes, operations manager for Herman’s Modern Bakery, said it seems local eateries lately are being “bombarded with increases” in costs.
Rick Jones, the head of the 360 Restaurant, said that while the added increase may seem small, it comes at a time when many establishments are already struggling.
“It doesn’t help anybody,” Jones said. “It just makes it harder and harder to do business. At some point, we’re going to have to look at what others are doing and think about raising prices.”
