Collusion in water price increase?

Representatives from local water companies allegedly met last week and agreed to raise their product’s prices effective yesterday.

Following the disclosure of industry leader Saipan Ice about its price adjustment that began yesterday, other companies randomly interviewed by the Saipan Tribune also bared hiking their prices effective yesterday—including S.T.a.R. Marianas Inc., which now sells a 5-gallon bottle at up to $2.50.

The meeting among water company representatives occured at a Garapan restaurant sometime last week, according to an official of one of the water companies.

Only the representative of one water company, Swift, did not attend the meeting, the official said.

Another official of a different water company also confirmed the meeting. The Saipan Tribune tried to obtain comments from the consumer counsel of the Attorney General’s Office early last night but failed.

There are some 17 water companies in the CNMI.

Thirty-four-year-old Rowena Masangkay, an accountant who belongs to a household of five, lamented the increase in water prices. Masangkay estimated that she would spend an additional minimum $150 for bottled water in a month, considering that she buys five bottles daily.

“Everybody is affected,” Masangkay said, also noting the additional expenses she has had due to gas price increases.

Marianas Ice and Water raised the price of bottled water from a dollar to $1.50. The price of delivered bottled water has also increased to $2.50 from $2.

S.T.a.R. water has decided to double the store price of 5-gallon bottled water to $2—as well as delivery price to retail stores at the same rate. Beginning June 21, the company would hike the price of bottled water delivered to houses to $2.50, which would reflect a $1-increase.

S.T.a.R. manager Ryoko Kurokawa said the company has been mulling the price increases since some months ago. The management decided to eventually implement the increase allegedly due to higher costs incurred by the firm.

“We were also hurt by fuel costs,” said S.T.a.R. supervisor Ed Mendiola. He also noted the upsurge in Japan prices of supplies necessary to maintain the company’s Japanese made reverse osmosis equipment—chemicals, module filter, R.O. membrane, etc.—and the increase in airfreight costs.

“The company is losing because of many requirements [that the government is imposing],” Mendiola said. He said the Department of Public Safety has required delivery truck drivers to obtain a medical examiner’s certificate worth $140. He also noted the cost of compliance with regulations of the U.S. Environmental Protection Agency and the Division of Environmental Quality.

Saipan Ice had adjusted the retail store price of 5-gallon bottled water from $1 to $2 beginning yesterday. Saipan Ice vice president Ador Songcuan said the company would also adjust prices of the product for delivery orders to up to $3 possibly this week, higher than the previous overall average price of $1.55.

Despite implementing cost-cutting measures, Songcuan said the series of fuel price hikes jacked up the company’s production and freight costs.

Saipan Ice’s fuel cost in May reached $7,200, much higher than the monthly total of up to $5,500 last year, reflecting a 40-percent increase. Songcuan added that freight cost for a 40-footer container van has increased by almost double from $3,800 to $7,200.

Mobil has raised gas prices in the CNMI six times since the beginning of the year for a cumulative gallon price adjustment of 27 cents. It first raised its pump prices by 3 cents, and then 4 cents, before taking on four rounds of 5-cent adjustments.

Shell has raised retail fuel prices five times since January for a cumulative price adjustment of 25 cents per gallon. It first raised gallon prices by 7 cents in January, before increasing them again by 5 cents three times, and then 3 cents.