Gas cartel? Attorney general to launch probe into 'coordinated' gas price hike on Guam

By Pacific Island Times News Staff

Raising suspicion about a gas cartel on Guam, Attorney General Douglas Moylan will launch an investigation into the purportedly premature spike in prices at local pumps amid the Middle East crisis that has been threatening global oil supply.

While acknowledging that national emergencies may trigger legitimate price adjustments, Moylan questioned the “timing of the increase in local pricing, the coordination of a price change between merchants, amount of price increase and its duration.”

Moylan wanted to know “when the pricing kicked in” and why the prices spiralled "so quickly while there may have been reserves” purchased at lower rates.

Gas prices on Guam have steadily increased following the U.S.-Israel strikes on Iran on Feb. 27.  Local motorists began seeing gas price hikes on March 9.

“Why did all gas companies increased prices at the same time?” the attorney general asked.

Mobil, Shell and SPPC 76 are Guam’s fuel distributors.

As of this week, regular gas costs $6.079 a gallon, from the pre-war level, which was $4.879. Premium went from $5.269 to $6.469 a gallon and diesel price rose from $5.349 to $8.49 / gallon.

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Guam's gas companies acquire their supply from Singapore, Japan and Korea, according to Energy Information Administration.

The agency said liquid bulk products are typically delivered to the Marine Industrial Terminal via tanker vessels every 20 days. “These products are then distributed by pipeline from their storage tanks to their loading racks, where the products are loaded into tank trucks and distributed to service stations, as well as commercial and government accounts throughout Guam,” the energy office said.

Moylan sought a closed-door meeting with Guam’s fuel company executives “to discuss this yet unknown, unprecedented increase in consumer gas prices.”

The American Automobile Association reported that global crude oil prices hovered around $101 per barrel on Monday, marking a staggering 44 percent spike since the Middle East conflict, which now enters its third week.

The gas price spiral was propelled by the closure of the Strait of Hormuz, a critical transit route responsible for nearly 20 percent of global oil and liquefied natural gas trade.

Moylan said the round table meeting will seek to determine how the global situation trickles down to local pumps and how gas companies set their prices.

Specifically, Moylan said he wanted to know “where we were before the Iran war in consumer and commercial and government pricing” and “what causes the dramatic increase in prices.”

Moylan is seeking the companies’ full cooperation to help him “understand their situation and circumstances, including what is the usage of Guam consumers,” and “discuss strategies we can assist them with to lower the gas prices for Guam.”

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