Oil prices up again

In what appears to be another burden in the driving public’s fuel budget, Mobil Oil Mariana Islands Inc. yesterday implemented another round of increase in prices of petroleum products amid public clamor to roll back the figure to January 2000 levels.

The new round of increase in petroleum products is the second in the CNMI in a period of less than 30 days. The company, citing increasing mark-up prices in world market, raised fuel prices by four cents per gallon last Feb. 1, 2000.

Mobil gas stations in the Northern Marianas yesterday started selling three major petroleum products at higher prices averaging five cents per gallon.

Retail price of regular unleaded fuel is now $2.059 per gallon, up by 39 cents from the February 1 level, while premium unleaded shot up by 59 cents per gallon to $2.149 per gallon. Diesel is now being sold 55 cents higher at $1.919 per gallon.

A senior Mobil official said external market forces have driven international market prices up since January, particularly in the Singapore regional market, forcing the oil company to adjust prices of regular and premium fuel.

Despite the increase in international prices of petroleum products in recent years due to fears related to rollover computer glitches, Mobil vice president and sales manager Abi Adigun said the company has tried not to pass on the hike to end-consumers.

He 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.

However, there is a trend of persistent increase in world prices of oil products due to the continued adherence of the Organization of Petroleum Exporting Countries to reduced production quotas and higher regional demand, according to Mr. Adigun.

“Prices have reached a level not seen prior to the Gulf War. We continue holding back price increases expecting a reversal in the market situation but prices of petroleum products across the barrel continue to rise,” he explained.

Since January last year, Mobil has increased pump up price at its company-operated service stations by only 28 cents per gallon although regular gasoline prices have increased by over 40 cents per gallon on the Singapore regional market.

Mr. Adigun said the oil company will continue to hold back on price increases “while we continue to focus on expense reduction initiatives to mitigate impact of this upward movement in world market prices.”

Business analysts said the increase in fuel prices would eventually push prices of commodities up, due to the corresponding increase in transportation costs.

The last time CNMI witnessed a reduction in oil prices was in December 1998 when fuel prices in the local retail market dropped at an average of 0.02 to 0.04 cents per gallon.

Economic upheavals which have fanned beyond the Asia-Pacific Rim triggered a lower demand and sales to airline companies, hotels, construction sector, power plants and other commercial and industrial establishments.

Previous reports claimed fuel prices which have hit 12-year lows created a series of consolidation and restructuring among major oil companies, including the $73.7 billion merger between Mobil Corp. and Exxon Corp.

Prices of unleaded gasoline for both Mobil and Shell dropped from $1.809 per gallon in December 1998 to $1.779, while super unleaded decreased by 0.04 cents from $1.909 to $1.869 per gallon.

Over the same period, retail price of diesel sold in Shell gas stations fell from $1.669 to $1.639 per gallon, while it is sold at $1.645 in Mobil retail outlets, according to a report from Department of Public Work’s energy division.