NMI joins multi-state probe

The CNMI government has joined a multi-state inquiry into rising fuel prices across the nation following the destruction caused by Hurricane Katrina in New Orleans, even as both Shell and Mobil decided to increase local pump prices anew by up to 6 cents a gallon.

The new pump prices on Saipan are now almost $3.50 a gallon. Mobil gas stations on the island implemented a new round of price increases yesterday, while Shell disclosed that it would hike pump prices—its 11th for the year—beginning today.

Attorney General Pamela Brown disclosed yesterday that she has joined at least 43 other attorneys general for a multi-state inquiry into gasoline prices.

The CNMI government, in collaboration with the Federal Trade Commission, has been investigating Mobil’s pricing scheme for the Northern Marianas.

“Out here in the NMI, we are not especially impacted by the events surrounding Katrina. However, these islands are frequently hit by typhoons which sometimes lead to price spikes. We have also been experiencing an unrelenting rise in gas prices currently at $3.08 per gallon for the cheapest grade,” Brown told the other state AGs, who allowed the CNMI government to join the inquiry.

Mobil gas stations yesterday raised pump prices, which reached 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 have reached $3.129, $3.299, and $3.279.

Shell disclosed the price hike in a media statement yesterday, attributing the decision to rising global prices of oil. Shell would increase gallon prices by 6 cents for regular and premium gasoline and 4 cents for diesel.

“Consistent with our previous announcements, this rise is to maintain relativity with our cost of supply from Singapore. In January of 2000, the price of regular gasoline was trading at $30 per barrel in Singapore; Friday last week it closed above $90 per barrel,” Shell Marianas, Inc. president Phil Stalker said.

Shell’s new gallon prices are $3.239 and $3.399, respectively for regular and premium gasoline at full-serve rate. Its self-serve rate now sells at $3.109 and $3.279 per gallon. The price of diesel increased to $3.329 per gallon at full-serve rate.

“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.

“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 a gallon per adjustment, except last Aug. 30, when the gallon price adjustment reached 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. 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 were evident based on its current gallon rates, which have always been comparable to those of Shell.

Recently, CNMI consumer counsel Brian Caldwell said Mobil has submitted to his office documents that were the subject of an AGO subpoena. Caldwell said the FTC has been reviewing the documents. The AGO probe wants to find out if Mobil’s business practices regarding pricing constituted unlawful conduct.