Tuesday, January 7, 2014

BC Ferries to Institute Fuel Surcharge

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.