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JNB backs direct fuel purchase
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Posted on Jul 20 2005
Gov. Juan N. Babauta said he is inclined to support moves for the CNMI to purchase fuel directly from Singapore in order to save on costs.
“I’d support that option if we are going to get oil at a cheaper price,” said Babauta yesterday when asked on the Senate’s idea for the CNMI to jointly buy fuel from Singapore with Guam.
“That’s certainly something that we’d consider,” said Babauta.
Sen. Joseph Mendiola earlier said that he and Sen. Diego Songao, chair of the Committee on Public Utilities, Transportation, and Communications, are set to leave for Guam Monday next week to discuss a possible partnership with the Guam Power Authority in bringing in fuel from Singapore.
Mendiola, chair of the Senate Committee on Fiscal Affairs, said GPA has indicated its interest to work with the CNMI on this matter.
“If that happens, we’re talking here of huge savings for the government,” said Mendiola.
He said Guam has been purchasing its fuel directly and that Guam commissions a tanker to ship the oil.
“We could share the cost for the shipment,” he said.
The senator said that his office would be writing Babauta formally to urge him to use capital improvement funds to build fuel tanks in the CNMI.
The Commonwealth Utilities Corp. currently buys fuel from Mobil Oil Marianas. The utility firm recently signed a new two-year fuel supply contract with the oil company, amounting to $120 million.
The CUC said that it now spends $60 million a year on fuel, from $30 million in October 2003.
This developed as CUC is about to award a contract for the privatization of power generation on Saipan in less than two months.
Under the proposed contract, CUC would provide fuel to the contractor in running the main power plant in Lower Base.
