By Mark Edward Nero
British Columbia-based BC Ferries says that due to current
world fuel market conditions that affect the prices that BC Ferries must pay
its diesel fuel suppliers, it will institute a 3.5 percent surcharge on the vast
majority of its routes starting Jan. 17.
Two routes are being exempted from the surcharge increase:
the Port Hardy-Prince Rupert and Prince Rupert–Haida Gwaii routes.
BC Ferries’ President and CEO Mike Corrigan said market
pricing indicates that the price differential will continue throughout 2014.
“We are well aware that implementing a fuel surcharge is
unpopular with our customers, and we are doing everything we can to keep our
fuel costs as low as possible, including building new ships with LNG
capability,” Corrigan said. “We have waited as long as we can to implement a
surcharge, however we must act now as it is clear that fuel prices are unlikely
to decline in the foreseeable future.”
In November 2013, BC Ferries’ monthly fuel prices reached a
new high for the year; $1.09 per liter. The company says it has reduced its
fuel consumption by 5.8 million liters since 2004, the cost of fuel in fiscal
2013 was $121 million, up from $50 million in fiscal 2004.
The company maintains that each one-cent per liter increase
in the cost of diesel translates into a $1.2 million increase in company
expenses.
Since 2004, BC Ferries has had fuel surcharges, fuel rebates
and periods of time with neither, all based on the market price of diesel fuel.
BC Ferries is one of the largest ferry operators in the
world, providing year-round vehicle and passenger service on 25 routes to 47
terminals, with a fleet of 35 vessels.