B.C. Ferries to add 1.5 per cent fuel surcharge on most routes

Citing the high price of fuel, B.C. Ferries will implement a fuel surcharge of 1.5 per cent as of June 1.

That means starting next month, a car and driver on B.C. Ferries’ busiest route — between Swartz Bay and Tsawwassen — will pay $75.80 per trip, an increase of $1.10, while walk-on passengers will pay $17.45, an increase of 25 cents.

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The surcharge on most of B.C. Ferries’ inter-island routes will be 15 cents for an adult and 45 cents for a vehicle.

The last time B.C. Ferries implemented a fuel surcharge was from January to December 2014.

B.C. Ferries said it closely monitors the cost of fuel and applies a rebate or surcharge, or neither, under a regulatory process that is independent of fares. When fuel prices are low, it passes savings on through a rebate and when they’re high, the surcharge is applied. The last rebate lasted from 2015 to 2018.

B.C. Ferries chief financial officer Alana Gallagher said given the regional price of diesel fuel, the surcharge is unavoidable.

The company uses fuel-price hedge transactions to lock in a portion of the fuel price to help reduce fare volatility, she said.

Gallagher said due to relatively low commodity prices in 2018, B.C. Ferries was able to lock in fixed prices for about 85 per cent of its diesel consumption for the 2020 fiscal year.

“With these hedges in place, if the regional prices had continued at average levels, it is possible that no surcharges would have been required,” she said. “However, the regional price of diesel increased 21 per cent since the start of 2019, about a 20-cent-per-litre average increase in the price for diesel. As a result, a 1.5 per cent fuel surcharge is in order.

“If B.C. Ferries had not been able to hedge the commodity price as it did in 2018, the fuel surcharge would have been higher.”

B.C. Ferries chief executive officer Mark Collins said the corporation will continue to work on strategies to keep travel affordable.

“We will continue to take measures to reduce our fuel consumption further through the introduction of diesel electric battery hybrid vessels,” he said. “We now have five vessels operating on liquefied natural gas, a cleaner and less-expensive fuel source than the ultra-low-sulphur diesel we use for our other vessels. LNG is approximately 50 per cent less expensive than diesel, and its use results in fuel savings that are passed on to our customers.”

The company says it does not benefit financially from surcharges or rebates.

On average, the fuel surcharge will be 1.5 per cent on all routes, with the exception of the Port Hardy-Prince Rupert, Prince Rupert-Haida Gwaii and Port Hardy-Central Coast routes.

Those routes have a separate mechanism to take into account the cost of fuel.


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