By Grant Warkentin
BC Ferries announced this afternoon it’s adding a five per cent fuel charge to all routes, starting June 16.
“We know that any added cost matters to our customers, and we don’t take that lightly – especially for the people, communities and businesses that rely on our services every day,” said Dallyn Willis, Chief Financial Officer at BC Ferries. “Like others across the province, we’re feeling the direct financial impact of high global fuel prices. We’ve used the fuel deferral account to absorb those increases for as long as possible, but given the sharp and persistent rise in these costs, we’ve reached a point where a temporary fuel surcharge is needed. We’re taking this step to carefully manage those pressures in the most measured, gradual and responsible way possible while fuel prices remain elevated.”
BC Ferries budgets for fuel, mostly marine diesel, at set rates months in advance. If it can get the fuel for less than the set rate, the difference goes into a fuel deferral account. If global markets drive fuel prices higher than those rates, the ferry corporation can use the account to make up the difference. If the account is nearly empty, the Crown corporation is authorized to use fuel surcharges to cover increased costs.
The surcharge is temporary. If fuel prices stabilize or show a steady decline, the surcharge will be reduced or removed.
The conflict in Iran and the reduction in ship movements through the Strait of Hormuz has caused fuel prices to increase globally. Even though most of BC’s fuel comes from Alberta and Washington State, oil is a global commodity and increases in commodity pricing are passed on to customers regardless of the physical origin of their fuel.
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