Mobil prices under investigation

Despite successive fuel price rollbacks on Saipan, gas prices on Tinian and Rota have remained as high as over $3 per gallon, prompting the CNMI Attorney General’s Office and the Federal Trade Commission to look into the matter.

CNMI consumer counsel Brian Caldwell said yesterday that Mobil’s gas prices on Tinian and Rota are now the subject of economic analysis by FTC’s Bureau of Competition to determine if they are at anomalous levels, in connection with a national gas price-monitoring project.

Mobil Oil Mariana Islands Inc. president Jeff C. Borja said that, although worldwide oil prices have eased, the company has to recover increased product and freight cost over the past year. He also said that operating business in a place with a small market like Tinian and Rota impacts on fuel prices.

Borja also said the company incurs higher freights costs to deliver fuel on Tinian and Rota, explaining that petroleum products are transported to those islands by a coastal tanker, a smaller tanker than the one that transports fuel to Saipan.

Rota’s municipal council would pass a resolution urging Mobil to roll back gas prices on that island, Caldwell said.

“We received complaints that the price of gas remains at over $3 per gallon on Tinian and Rota,” Caldwell said in a telephone interview.

A Mobil station in Songsong, Rota disclosed yesterday that its gallon prices are $3.10 and $3 for diesel and regular gasoline, respectively. No price rollback took effect on Rota’s gas stations last Tuesday, when Mobil’s gas stations on Saipan implemented that move last Tuesday.

Mobil reduced gas prices on Saipan by 7 cents a gallon earlier this week. Before the price rollback, Mobil stations on Saipan pegged regular, super gasoline and diesel’s gallon prices at $2.769, $2.869 and $2.749, respectively, at full-serve rates. Self-serve rates were $2.559, $2.669 and $2.659, respectively.

As early as December, Caldwell had written to Karen Berg, federal-state relations coordinator for the FTC’s Bureau of Competition, reporting that gas prices on Tinian and Rota had been typically 20 to 30 cents more per gallon than the gallon prices on Saipan.

Caldwell said that, when the world price of oil peaked at $55 per barrel in October 2004, the price per gallon of gas on Saipan was around $2.65 (regular unleaded). Now that oil prices have eased somewhat, the price per gallon on Saipan is down to around $2.55 per gallon.

“Inexplicably, the price per gallon on Tinian and Rota has actually increased during this period of gas price decreases to $2.99 per gallon of regular unleaded and $3.15 per gallon of diesel. This is where the price remains today on these islands,” he said.

Mobil’s Borja said that, while Mobil raised gas prices on those islands by 6 cents a gallon, it reduced gallon prices by 5 cents in December to pass on to the consumers savings resulting from the easing of world oil prices.

“However, we must express that as a result of the significant rise and slight softening in world oil prices over the past year, Mobil continues to be in a catch up mode to recover product and freight cost,” he said.

“For your information, Mobil has had to make substantial financial investments in our facility [on] Rota as a result of damages sustained by supertyphoon Pongsona. Also, an investment [on] Tinian to support the government’s plans for an aviation fueling facility to develop the tourism industry, which unfortunately resulted in Mobil incurring additional costs,” he added.

Saying that Mobil’s explanation is inadequate, Caldwell said that the AGO would look into whether or not Mobil committed unfair trade practices.