Call for subsidies to counter ferry fuel surcharge

A lobbying group has called on the Manx government to consider stepping in to help firms hardest hit by an increase in the fuel surcharge levied on ferry freight traffic.

The Isle of Man Chamber of Commerce said 88% of the 58 firms that had taken part in a recent survey had said the 21% rise from April would hit their profits, and 48% said they would pass on the extra cost to their customers.

It has called for the government – which owns the Isle of Man Steam Packet Company – to consider subsidies for firms "most acutely affected" while volatility in the oil market continues as a result of the Middle East conflict.

The BBC has asked the government to respond to the request.

The government has previously said the surcharge had been regularly adjusted both upwards and downwards over the last four years and was still below the 2022 peak which followed Russia's invasion of Ukraine.

The latest rise has seen the surcharge on freight increase from £8.79 to £11.06 per metre.

The Chamber of Commerce said it recognised the Steam Packet was "operating in a challenging environment and that the surcharge reflects genuine fuel cost volatility".

But it pointed out the government had "the power to control the degree to which increased costs are passed on to businesses".

The business lobbying group has called for clear communication about the surcharge and how it will be reviewed, consideration of a "targeted subvention" to protect businesses and consumers, and additional support for hardest-hit firms.

Those included hospitality, agriculture and healthcare businesses, as well as the charity sector.

The Chamber of Commerce said it intended to write to the government to highlight its members concerns and request a meeting.

The Steam Packet said fuel costs were currently double those of late December, and that the rise in the fuel surcharge had meant overall standard fares had only increased by a "modest" 2%.

The surcharge was a "non-profit mechanism" commonly used in the travel industry to "help protect service delivery during periods of fuel price unpredictability", it said.

The system has been in place under the firm's contract with the government for two decades.

"The company remains focused on balancing cost pressures with its longstanding commitment to residents and businesses," it added.

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