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CPA to reduce wharfage fee by 25%
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Posted on Oct 30 2005
Consumers are likely to get some relief with the Commonwealth Ports Authority deciding to reduce the rate of wharfage assessed on fuel shipments.
CPA is planning on cutting the wharfage fee by 25 percent from the current rate of $5.50 per revenue ton. This represents a decrease of about $1.38 per revenue ton.
CPA executive director Carlos Salas said Friday that the fee reduction was part of the settlement agreement that was executed to resolve $6 million in retroactive wharfage fees that Mobil had owed the ports authority.
“Of course, this will benefit not only Mobil, but Shell and the public as well. The cost of fuel has gone up so high; we want to help the consumers,” Salas said.
An amendment to CPA’s terminal tariff agreement with the oil companies needs to be made before the fee reduction can take effect.
Salas also assured CPA stakeholders that the rate decrease would not harm the ports’ financial status. “It was factored in when we prepared our budget for fiscal year 2006. Based on projection, the ports will manage even with the lowered fuel wharfage rate,” he said.
CPA and Mobil entered into an agreement on Oct. 14 to settle wharfage fees for which Mobil was not billed from October 1997 through June 2004.
Mobil’s unbilled wharfage fees amounted to $6 million when CPA discovered the oversight last year. This amount includes charges from the Port of Saipan and the West Tinian Harbor, where Mobil maintains fuel facilities.
Mobil has paid its $2.7-million part in the settlement agreement. The payment includes $718,775.03 in retroactive charges that Mobil asserts is due Shell Marianas as a result of fuel products it brought into the Commonwealth for Shell.
Meanwhile, the Commonwealth Utilities Corp. has yet to pay $3.4 million wharfage fees on fuel provided by Mobil to CUC.
The utility has already stated that it could not afford to pay the wharfage at this time. CUC has also expressed intent to question Mobil’s assertion that retroactive charges were collectible from CUC under its previous and current contracts with the oil firm.
