THE Attorney General’s Office is supporting the passage of a bill that would prohibit Mobil Oil Marianas and Shell Marianas from opening and operating fuel retail service stations in the CNMI.
The bill aims to ensure fair gasoline pricing.
AGO earlier wanted to determine whether the oil giants were violating business laws in the CNMI, but was told that the legal expenses would cost between $80,000 and $600,000.
Attorney General Robert Torres yesterday said this is “too costly” for the government.
“So we are trying to approach it from a different angle—through legislative process. We hope this bill will be able to accomplish its goal of separating the oil dealers from the retailers to protect consumers,” Torres said.
Torres said this “divorcement statute” would provide consumers with more protection against high prices of fuel.
AGO at the same time will hire lawyers with anti-trust law experience, Torres said. He said depending on these lawyers’ level of expertise, AGO may conduct its own preliminary investigation into the oil giants’ pricing methods.
The CNMI gets its oil supplies from Shell and Mobil, which are also the retailers of the gasoline products.
AGO said retail prices are identical at all retail stations, be they Shell or Mobil. This situation, according to AGO, has existed for a number of years, and is documented by the government’s monthly price surveys.
On Saipan, there are only two independent retailers of fuel: One in Sadog Tasi and one in Chalan Kanoa. Both sell fuel at lower prices than those directly operated by Mobil and Shell.
Rep. Stanley Torres, R-Saipan, has repeatedly criticized Mobil and Shell for allegedly reaping excessive profits by charging higher fuel prices.
Cecille Bamba-Terlaje, Mobil manager for marketing and public relations, and Andrew Harford, Shell North Pacific president, could not be reached for comment.
Fairness in Gasoline Prices Act of 2002.
Rep. Andrew Salas, R-Saipan, author of House Bill 13-132, said since the mid-1990s, there has been a need to eliminate “anti-competitiveness and destructive operations” in the CNMI’s wholesale and retail gasoline market.
The bill, also known as the Fairness in Gasoline Prices Act of 2002, said that U.S. consumers pay as much as $1 less than their counterparts in the CNMI—despite having much higher gasoline taxes in the mainland.
CNMI consumers may be paying “too much” for this essential commodity due to five factors, the bill states.
All oil companies in the CNMI price exactly the same, irrespective of their different internal cost structures, it added.
Since the Sept. 11 terrorist attacks, U.S. retail prices have dropped by an average of 40 cents, while CNMI prices have only dropped by 12 cents, the bill states.
The CNMI’s gasoline comes from Singapore which has a lower refined price than U.S. refined gasoline.
The bill states that the CNMI has a much lower tax on fuel than the U.S. but that gasoline prices in the CNMI are historically higher than on neighboring islands.
