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Mobil threatens to suspend fuel delivery to CUC unless it is paid
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Posted on Mar 17 2005
Mobil Oil Mariana Islands Inc. is threatening anew to suspend fuel deliveries to the Commonwealth Utilities Corp., which made a payment short by $2 million last Tuesday.
CUC managed to pay only $1.9 million of its $3.9-million bill from Mobil on March 15.
On the same day, Mobil wrote CUC executive director Lorraine A. Babauta, giving the utility firm 30 days to pay the $2 million that is past due.
Mobil commercial territory manager Jojo Dadivas said in the letter that the oil company will stop supplying fuel to CUC if the utility fails to pay the amount due by the end of 30-day deadline.
Mobil also threatened to terminate its fuel supply contract with CUC and possibly bring the matter to court if no arrangement is made for the payment of the due amount.
“Should CUC fail to cure this default or provide commercially reasonable assurance acceptable to Mobil, Mobil may suspend deliveries of fuel to CUC until the default has been rectified, terminate the contract forthwith upon notice and exercise such other rights as may be available to it at law and under the provisions of the contract,” Dadivas said.
For his part, CUC comptroller Sohale Samari said that the firm is making arrangements with the fuel supplier. “We’re trying to stay current in our payments,” he said.
CUC, it was learned, is trying to write Mobil a promissory note for $2 million, in an effort to prevent suspension of fuel deliveries.
Mobil made a similar threat last month, after CUC managed to settle only $1.6 million of its $3.6-million bill.
To help CUC meet the payment, the Department of Finance paid its monthly dues to CUC a month ahead of the deadline. The department remitted to CUC $650,000, representing the government’s March 2005 payment.
