19 Dec 2005

Fuel set to run out in Marshall Islands within days

1:22 pm on 19 December 2005

The Marshall Islands faces the prospect of being without fuel within two weeks.

The Marshalls Energy Company has cut its relationship with its long time oil supplier Mobil Oil Micronesia, and the country now has only enough fuel to last until the New Year.

Our correspondent, Giff Johnson, in Majuro, has the details.

"It's the result of the Marshalls Energy Company being unable to reach an agreement with Mobil Oil Micronesia. They've had an agreement for 13 years but it expired a year ago and they've been unable to get a new agreement in disputes over pricing. If the Marshalls Energy Company doesn't organise a fuel delivery in the next week or so what it is going to have to do is halt sales of diesel fuel to fishing vessels and conserve all of the fuel it's got for power only. The kicker on that is that it uses fuel sales to the fishing boats to subsidise the cost of electricity and pay off Mobil."

Giff Johnson in Majuro.