The Marshall Islands Energy Company is accusing Mobil Oil Micronesia of threatening a potential fuel shortage for Majuro if its demands over an unreasonable profit margin is not met.
According to documents obtained by Radio New Zealand International, MEC's general manager William Roberts has called for the government to seek assistance from the US, the United Nations and the World Trade Organization to resolve the matter.
A sole diesel supply contract between Mobil Oil Micronesia, a subsidiary of ExxonMobil and the MEC expired last year and ongoing negotiations for a new contract have been unsuccessful.
A Mobil manager in Guam told MEC last month that prices will rise and it will have to pay millions of dollars in advance of diesel shipments.
MEC has accused Mobil of issuing impossible payment demands that has prevented the company from getting fuel delivered to its power plant.
Mr Roberts has accused Mobil of manufacturing the delay so MEC would have no time to negotiate a fair and mutually acceptable contract.
MEC provides electricity for 25,000 people in the capital city.
