BC Ferries today announced that due to current world fuel market conditions, the
company will remove the fuel rebates currently in place on June 27, 2018. BC Ferries closely monitors the cost of fuel and from time to time applies a rebate or surcharge under a regulatory process that is independent of tariffs.
BC Ferries uses a fuel rebate/surcharge mechanism to manage volatility in the price of fuel. When fuel prices are lower, BC Ferries passes lower fuel prices on to customers through a fuel rebate. When fuel prices are higher, BC Ferries charges a fuel surcharge specifically designed to cover the additional cost of fuel. The company does not benefit financially from the mechanism, as income raised from surcharges goes into a regulated Fuel Deferral Account, which is then drawn down to pay for rebates when the price of fuel falls.
Fuel rebates of 2.9 per cent for the major and minor routes and 1.9 per cent for the northern routes have been in place since the spring of 2016. Since that time, the price of fuel has progressively risen, but with government intervention the rebates remained in place, resulting in a $13 million deficit in the Fuel Deferral Account by March 2018.
This deficit was zeroed in April by agreement with the Provincial government, but the ongoing increases in fuel prices mean the fuel rebate is now being removed. For Gabriolans, the net effect will be a 30 cent increase in round-trip passenger fares and a 70 cent increase on the cost of a round-trip vehicle fare. Fare changes for experience card users will be proportionately less.