Oil prices down but NMI motorists still paying high gas prices

Posted on Oct 12 2011

Abraham Falig, of Tanapag, said his family spends some $180 every two weeks to buy gas for their two vehicles, a big chunk of the household budget. Just like many motorists in the CNMI, Falig thought that the sizeable drop in crude oil prices in recent months would also mean lower price at the pump on the islands but that has not happened.

Amid the fairly steady drop in crude oil prices—some $80 to $85 a barrel compared to over $100 a barrel at the start of the year—fuel prices at the pump are not dropping as quickly as island motorists would hope for.

Last week, crude oil dipped to its lowest price since September 2010 to below $78 a barrel.

“It’s ludicrous,” said Falig, referring to the $4.75 a gallon of regular unleaded gasoline on Saipan despite decreasing crude oil prices. “Gas is about a third of our monthly expenses. We used to spend less than $100 in gas every two weeks about a year ago.”

Martin Igitol, a government retiree, said CNMI motorists should start seeing a reduction in gas prices by now.

“How long should we wait until they drop the prices? When did they buy the fuel we’re still paying high prices for?” he asked.

Igitol said he just returned from Florida for a family matter and they were able to fill their Toyota Tundra rental vehicle for just $25.

“Here, a full tank for a Toyota Tundra could be $100. That’s the price difference between the U.S. and Saipan,” he said. Igitol said he misses the time when he’d only spend $22 a week for his pickup truck. He now spends $60 a week for gas.

Benusto Piteg, of Koblerville, said island motorists need “relief” from paying $4.75 a gallon of regular gas.

“What we spend on fuel could have been spent on something else like food,” he said, adding that Mobil, Shell, and even shipping companies should lower their prices.

Matson Navigation Co. has already reduced its fuel surcharge for the third time in a row because of the cut in the price of bunker fuel used to power its fleet.

Jeff Boyer, CNMI area manager for IP&E/Shell, said yesterday that the CNMI is still using “high-end stocks” but is about to change to “newer products.”

“We’re getting there,” he said, when asked whether CNMI motorists will soon see a reduction in pump prices.

In the meantime, motorists should observe conservation practices, he said.

The office of Jaime Ortega, president and country manager of Mobil Oil Guam, has yet to respond to media questions about fuel prices yesterday.

Mobil earlier said that retail pump prices are affected by a combination of factors, which include internationally traded wholesale prices, operating and capital cost, distribution costs, taxes and duties, currency exchange rates, and market competition.

A 41-year-old private sector employee, for his part, said that Saipan motorists should at least have a 5 to 10 cents decrease in gas prices, considering the reduced prices of crude oil.

“If they bought the gas prices at higher prices, how long will it take for them to market it and sell it?” he said.

Shell/IP&E and Mobil do not issue advance notices of price changes, so many Saipan motorists only learn of price changes by the price displays at gasoline stations.

The last time Mobil and Shell changed their prices was in July, increasing the prices by 10 cents a gallon.

Since then, a gallon of regular unleaded gas has been $4.759 a gallon, while super/premium unleaded gasoline is $5.079 a gallon. Diesel is $5.219 a gallon, higher than the current CNMI minimum wage of $5.05 an hour.

Gas prices in the CNMI are among—if not the—highest in the U.S. and its territories.

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