Matson to lower fuel surcharge on cargo to Hawai'i

Advertiser Staff and News Services

Matson Navigation Co. said yesterday it will lower its fuel surcharge assessed on cargo shipments to Hawai'i to 6.5 percent from 7.5 percent starting May 4 because of the recent decline in oil prices.

Matson Navigation's plan to roll back the increase on its fuel surcharge for cargo to Hawai'i comes as oil prices decline. Horizon Lines said it will likely match the rollback from 7.5 percent to 6.5 percent. Richard Ambo • The Honolulu Advertiser

Matson is rolling back the increase that went into effect on March 3 when oil prices were rising.

Crude oil for June delivery was down 99 cents, or 3.5 percent, at $27 a barrel yesterday on the New York Mercantile Exchange. Oil has plunged 32 percent from a 12-year high of $39.99 reached on Feb. 27.

"As is Matson's practice relative to fuel price adjustments, we are acknowledging the recent trend in fuel prices and feel that a reduction is warranted at this time," said Matson executive vice president Paul E. Stevens in a statement.

Stevens said hat the surcharge reduction "represents a 13 percent decrease in the dollar amount customers are currently paying for a fuel surcharge. It is important to note that while high fuel costs adversely affect many businesses, as well as consumers, transportation companies are especially hard hit. We will continue to monitor fuel costs and adjust the surcharge accordingly."

Matson said earlier that each rise of a $1 per barrel would amount to $1.8 million more in costs per year.

Horizon spokesman Brian Taylor said his company "will probably be matching" the Matson cut in the next few days. "Fuel is a tremendous cost-driver" when prices were going up, he said.

Members of the Organization of Petroleum Exporting Countries meeting in Vienna this week are worried that a surplus of crude oil will grow unless they cut back on production.

"An oil glut may form in two or three months," said Saudi Arabian Oil Minister Ali al-Naimi.