Mobil hikes oil prices by 4 cents

Mobil Oil Mariana Islands Inc. increased the prices of its three major oil products by four cents beginning yesterday, a senior company official disclosed, citing external market forces which have forced international market prices up since January.

The oil company has been forced to adjust the prices of regular and premium fuel, as well as of diesel, because of the continuous rise in prices of petroleum products in the Singapore regional market.

Mobil gas stations in the islands yesterday started selling regular unleaded fuel at $2.02 per gallon from the previous $1.98, while premium fuel is now sold at $2.09 per gallon from $2.05 last month.

Mobil stations are now selling diesel at $1.869 per gallon.

According to Mobil Oil Mariana Islands vice president and sales manager Abi Adigun, the company exercised a status quo in the prices of its petroleum products despite the increase in the international market due to Y2K bug-related fears.

Mr. Adigun pointed out that the oil company held back on price increases in anticipation of an eventual downward movement in world and regional prices after year-end inventory build up.

“Unfortunately, costs have continued to rise as OPEC [Organization of Petroleum Exporting Countries] participants continue to stay within their reduced production quotas and seasonal and regional demands make their impact felt,” he said.

He emphasized that costs of petroleum products in the regional market in Singapore shot up by more than 30 cents per gallon since Jan. 1, 1999 while Mobil prices have been adjusted by only 21 cents per gallon over the same period.

“However, we focused heavily on initiatives to reduce our expenses over the past year and improve our operational efficiency without any compromises to safety. This has helped tremendously to offset negative effect of rising product cost,” Mr. Adigun explained.

In a July 1999 survey of gasoline stations, the Energy Division of the Department of Public Works reported an average of 0.04 cents increase in prices of unleaded fuel from Mobil to $1.899 from the previous month’s $1.829.

According to the survey report, prices of super unleaded fuel in the local retail market increased by an average of 0.03 cents per gallon in both Mobil and Shell gas stations in the islands.

Retail price of diesel sold in Mobil gas stations jumped from $1.769 in June to $1.773 last month, while it stagnated at the $1.769 level in all Shell gas stations. In December last year, it was sold at $1.645 in Mobil retail outlets and $1.669 in Shell stations, according to the survey report from DPW’s energy division.

While the increase may appear too low to impact the prices of basic commodities, business analysts say the development may translate to additional expense for both individual consumers and investors.

The increasing retail prices of petroleum products will have a direct negative effect on individuals driving their own cars, or companies that provide transportation to their employees.

Increasing prices in the Singapore regional market pushed major oil companies Mobil Oil Mariana Islands and Shell Marianas Corporation to make adjustments in local prices by five cents a gallon in April last year.

Also, oil companies operating in the CNMI in August last year adjusted prices of petroleum by an average of $0.4 per gallon akin to the implementation of Public Law 11-25 , or the Fiscal Integrity Act of 1998, which repealed the sunset provisions in the local tax laws.

The government was expecting to generate an additional $9 million from the new revenue-collecting measure. Public Law 11-25 brought taxes imposed on fuel to $0.15 per gallon.