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House committee asks for explanation on gas prices
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Posted on Nov 22 2008
Rep. Joseph C. Reyes says he has growing concerns about the price of gasoline in the CNMI.
Reyes, in a letter to Shell Marianas and Mobil Marianas officials, asked why gas prices are 30 cents to 50 cents more than in 2007, when crude oil was trading at similar prices.
“Gasoline prices seem to be $.30 to $.50 a gallon higher this than they were in 2007 when oil was trading for the same price, Can you explain this?” the chairman of the Committee on Commerce and Tourism wrote. “Also, why are gas prices on Saipan consistently $.13 a gallon higher than Guam? Tinian prices are $.54 a gallon higher than Saipan and Rota prices are $1.00 a gallon higher than Saipan! Surely this can’t be just the cost to ship and unload fuel from the same tanker.”
He added, “we realize that there may be some delays reacting to the fluctuations in oil prices, but inflation alone cannot account for the disparity seen in just one year.”
An official from Shell earlier said oil prices have dropped faster than the company has been able to recover their costs.
Commerce Secretary Michael Ada said the CNMI has fuel capacity issues.
“We don’t have the storage that Guam does or Hawaii does,” he said. “Which means they don’t have to order as often as we do. If we have a smaller amount that we can store, in terms of fuel, that means we deplete it faster and have to order more often.”
More orders mean more money spent on shipping, docking, and loading, he said.
“That’s one of the reasons our prices are relatively higher, even in relation to Guam,” Ada said.
