Saipan’s diesel 2nd most expensive in the nation

Saipan now has one of the highest diesel prices among all states across the nation, with the new average price of diesel higher than those of any other states except California, a development that continues to impact motorists, businesses and the Commonwealth’s tourism and economy.

The average price of diesel on Saipan is now $3.294 a gallon, with Mobil and Shell increasing their fuel prices this week. At least 33 states have average diesel prices below $3 per gallon at self-serve rates.

Except for California’s average diesel price of $3.384, Saipan’s rate is higher than the average diesel prices of all other states in the nation, based on yesterday’s AAA Daily Fuel Gauge Report. AAA’s Daily Fuel Gauge Report is updated each business day. No data was available for U.S. territories.

Hawaii’s average price for diesel was slightly lower at $3.229, while Louisiana’s rate was much lower at $2.746 despite Hurricane Katrina’s severe destruction in New Orleans. New York’s average was only $3.089 per gallon, while the average gallon price in Washington was $3.201.

For regular gasoline, the CNMI’s average self-serve rate ranked 15th at $3.119 per gallon, higher than California’s $3.052. For premium gasoline, though, Saipan’s average self-serve rate ranks 37th at $3.289 per gallon. The national average premium gasoline price was as high as $3.710 in the District of Columbia.

Saipan’s average prices are higher than yesterday’s national gallon price average of $3.042 for regular gasoline and $2.955 for diesel.

Shell’s price increase this week hiked Saipan’s gallon prices to $3.239 and $3.399, respectively for regular and premium gasoline (full-serve rate). Its self-serve rate now sells at $3.109 and $3.279 per gallon. The price of diesel increased to $3.309 per gallon.

On Wednesday, Mobil gas stations raised pump prices to as high as $3.459. Mobil stations now peg full-serve gallon prices at $3.299, $3.459, and $3.329 for unleaded and super unleaded gasoline and diesel, respectively. Self-serve rates are now at $3.129, $3.299, and $3.279.

In October last year, Mobil’s regular and super gasoline were being sold at full-serve rates of $2.809 and $2.899 a gallon. Self-serve gallon rates were $2.599 and $2.699, respectively, while diesel retailed at $2.709 a gallon. Shell was retailing regular and premium gasoline at $2.599 and $2.699 a gallon, respectively at self-serve rates, while diesel was sold at $2.779. Full-serve rates for regular and premium gasoline were $2.709 and $2.799 per gallon.

The new prices came about through gradual price adjustments over a period of time. When the Attorney General’s Office noticed the frequency of price adjustments in early 2004, it reacted by initiating a complaint with the Federal Trade Commission’s Bureau of Competition in April.

The complaint sought assistance in ascertaining whether or not anomalies in trade practices were occurring in the Northern Marianas. At that time, Mobil gas stations, for instance, retailed regular and super gasoline at $2.539 and $2.629 per gallon at full-serve rate. Self-serve rate for regular and super gasoline were then sold at $2.329 and $2.429, respectively.

Motorist Peter Woo, who was gassing up in Garapan yesterday, said, “It’s terrible!” upon learning of the new price increase.

“I can’t do anything,” he added, disclosing that he now spends about $50 weekly for gasoline. Last year, he was spending about $40 a week.

Woo said the increased fuel prices have also impacted his grocery business in As Lito, with the higher prices of commodities resulting in lower sales turnout.

Ambyth Trucking Inc. manager Fred Taitague said the company has no choice but to pass on the cost of rising fuel prices to the customers.

“This is not good. The cost will obviously be passed on to consumers,” Taitague said.

Ambyth operates some five trucks for its trucking services. Taitague said business has generally slowed down, along with the reduction of CNMI exports, including apparel.

Even hotels have been impacted by the rising cost of fuel. Hotel Association of the Northern Mariana Islands chair Lynn A. Knight disclosed that the Commonwealth Utilities Corp. has requested hotels to use their generators full-time to help in power load shedding.

“The fuel cost is a factor in our overhead. The rising fuel cost is quite difficult, especially for smaller hotels,” Knight said. “We have to be ready with our generators 24 hours a day. Hotel guests—you don’t want them to be in the dark.”

The new fuel price increases came following a slight decline in hotel occupancy in the CNMI and relatively low average room rate at $99.08, the second lowest average room rate for August in the last 14 years.

Knight said hotels are looking at ways to conserve energy, including the use of energy-efficient equipment. While other businesses could simply pass on the cost of rising fuel costs to consumers, Knight said hotels do not want to diminish the islands’ competitiveness as a tourist destination; thus, hotels would not increase service and product rates as a result of high fuel costs, but only when improvements and new facilities make the rate adjustment viable.

The HANMI chair also said the government, including CUC, should do its part in maximizing efficiency by addressing power line losses.

CNMI consumer counsel Brian Caldwell said the CNMI typically has higher average gas prices than in any other state. But he said the government doesn’t actually know why this has been usually the case.

“That’s one of the reasons why states are looking at gas prices—to know how fuel companies set fuel prices,” Caldwell said.

The CNMI government has joined a multi-state inquiry into rising fuel prices across the nation following the destruction caused by Katrina in New Orleans. Attorney General Pamela Brown disclosed that she has joined at least 43 other attorneys general for a multi-state inquiry into gasoline prices.

“Every time the gas companies raise their prices, they issue the same cookie cutter press release stating the rise is due to increased demand from China and consumers are expected to accept this. The fact is that we simply do not know enough about the exact nature of supply and reserves,” Brown said Wednesday.

“Is fuel distribution intentionally being misallocated? It is no secret that OPEC controls world oil prices through control of supply. Unfortunately, this is a problem that requires tremendous resources to analyze and address. A multi-state effort to address this problem therefore makes a lot of sense,” she added.

Shell had just adjusted pump prices thrice last month by up to 8 cents per gallon per adjustment, except last Aug. 30, when it the gallon price adjustment only reached up to 6 cents. It had increased gas prices beginning Aug. 9 and on Aug.17.

For this year, Shell had rolled back pump prices only twice—in January and May. It has been increasing pump prices almost every month, except for implementing the rollback in May. Last July, Shell implemented upward gallon price adjustments twice—by up to 7 cents beginning July 7 and by 6 cents the following week.

Mobil rarely releases media statements regarding price increases, but the adjustments have been evident from its gallon rates, which have always been comparable to those of Shell.

For a comparative look at gas prices nationwide, visit the AAA’s Daily Fuel Gauge Report at http://198.6.95.31/index.asp.