Guam – The Department of Labor’s Chief Economist Gary Hiles says soaring oil and gas prices will have a significant impact on Guam’s economy and on Guam’s number one industry-tourism.
“Tourism market depends on people flying here and as the price of fuel goes up the fuel surcharges are likely to be added to those ticket prices and what we saw in 2009 is when we had a similar spike in fuel prices that had a significant reduction in the number of tourist arrivals,” said Hiles. DOL’s Chief Economist says that Guam residents consume about 40 million gallons of gasoline per year.
“Because gas prices over the last year have gone up by about a dollar that translates into an additional $40 million dollars in funds that would be leaving the economy to pay for just the higher fuel costs. If you include the other fuels such as the airline fuels it would be about a 100 million dollars over a 100 million dollars loss to the economy in a year,” explained Hiles. This is all money that will go off-island to major oil corporations.
“And what happens is a lot of the higher prices people pay for fuel really just re-directs their consumption so if they spend more on fuel they have less money left over for shopping and restaurants and other things that they need,” said Hiles.
Anything that uses fuel will go up, like electricity and shipping costs which in turn usually means an increase in the costs of goods and services. So will gas prices continue to rise? “It’s basically not predictable it just depends on so many things that could happen in the market and that could change from day to day especially with the situation in the Middle East and North Africa,” explained Hiles. As for the long term, the DOL economist says overall, oil will continue to rise as oil gets harder and harder to find and more expensive to produce.
So what can we do about all of this? Both Hiles and Speaker Judi Wonpat say we can start by doing our best to reduce our personal consumption. For example, using more energy efficient appliances, car pooling, walking, riding bikes, or using mopeds when possible. While she recommends that we try to conserve Speaker Wonpat does understand the difficulty with all of these things which is why she says we need to improve Guam’s mass transit system not only by improving our bus based system but also building a new one. For example, a monorail system. “You just take the main thorough fare marine drive and go from Andersen to Navy and just have that mini monorail straight down,” said Speaker Wonpat.
The speaker also says that GovGuam should consider taking school bus operations away from public works and placing them under a revamped mass transit system.
