As of yesterday morning, self-serve gasoline cost about $3.94 per gallon for regular grade on Saipan. Also as of yesterday, oil was trading at its year-to-date high in New York. West Texas Intermediate crude stood at about $60 a barrel. People who deal with oil markets are keeping a sharp eye on prices right now.
I don’t know any pros on the automotive side of the fuel market, but airplanes burn a lot of fuel and I do have friends in that realm. An old Saipan hand, who now lives in the states and sells jet fuel, told me that his costs for fuel have been steadily rising over the past few weeks. He thinks it’s just the normal wiggling of the market, though. He hasn’t heard any rumors that might indicate there’s a more substantial trend in the making. That doesn’t mean there isn’t a trend arising, of course, but, as of now, he’s not hearing any worries in his circles.
Back on the car front, springtime seems to inspire talk about new cars, especially fuel-efficient models, and I have to admit that some of my older iron is costing too much to feed.
I’ll draw some numbers in the sand, so I’ll grab a stick and pick some assumptions out of the blue sky. If you drive an average of 30 miles per day on Saipan, that’s 10,950 miles a year. At 15 miles per gallon you’ll be burning 730 gallons per year, amounting to $2,876 a year, or $240 a month. A more efficient car that gets 25 miles per gallon would burn 438 gallons per year, costing $1,726 a year, or $144 a month.
So the more efficient car would save $1,150 per year, or $96 per month, in fuel.
Those are just out-of-thin-air mileage numbers, of course. I have no idea what most people are getting, but Saipan’s stop-and-go driving is not friendly to mileage calculations. Furthermore, I do a lot of driving wherever I am, Saipan included, so perhaps my 30 miles per day is a bit heavy for some folks on the island.
Anyway, let’s have more fun with this scenario.
Let’s consider a hypothetical car loan that’s five years long with an interest rate of 6 percent annually. Let’s also consider that we could get the more fuel efficient car on such a loan. If we contribute our $96 in monthly fuel savings to payments toward that car, the $96 will carry $4,966 worth of car.
That’s not much car. But maybe it could help swing the balance in favor of a new, more fuel-efficient car if there are other reasons in the mix, or if you’re going to get one anyway and want to sell the idea to your spouse.
Of course, that’s merely a one-dimensional look at the fuel angle. There are a lot of other factors involved in a new car purchase that I’m ignoring.
Given the realities of the car market, though, as well as the condition of many island pocketbooks, I’d say it’s not uncommon to be spending $240 a month in gas for an older car that has probably seen better days, especially if you drive a lot for business errands.
One related problem is the constant, almost torturous uncertainty that many people face over their jobs. Having a new car is one of life’s greatest pleasures, but the shine can come off the prospect if you’re worried about having to sell the thing at a loss because your job left the island. Consequently, money that could otherwise be spent on more efficient cars is getting burned as fuel, as many potential buyers lack the confidence necessary to make the long-term capital commitment. The CNMI has that problem in a lot of areas, not just cars.
People often consider the big projects, like hotels, when it comes to investment activity, but I’d submit that what’s also important is the household level of capital commitment to things like cars, appliances, homes and associated maintenance, and even education and development of job skills. Some of this stuff isn’t formally tallied as investment by textbooks, but the fact remains that, without some rational basis for financial confidence, the island can start taking a shabby, rundown appearance, where a lot of stuff is worn out or broken, and there doesn’t seem to be much reason for fixing things up since anyone’s fortunes and hopes could all blow away with the wind, be it of the literal or the figurative variety.
Egads, that’s a pretty downbeat thing to ponder. I think I’ll cheer myself up. It’s time to take a nice drive. Four bucks won’t get you much these days, but it’ll buy enough gas to put a few miles between me and my worries.