Matson announces increase in fuel surcharge
By Sean Hao
Advertiser Staff Writer
A rise in the price of crude oil is spilling over into higher costs for shipping goods to Hawai'i and may eventually lead to higher electric bills.
Matson Navigation Co. yesterday said it will raise its fuel surcharge from 6.5 percent to 7.5 percent Sept. 15 to offset rising fuel costs. The change would increase the surcharge on the $908 charge to ship a car between the West Coast and Honolulu by about $9.
Matson rival Horizon Lines, formerly CSX, quickly announced it would match the increase.
"As anyone who drives a car is well aware, fuel prices have been rising steadily in recent months," said Dave Hoppes, vice president for Matson's ocean services. "We cannot continue to absorb these additional fuel-related operating costs."
Crude oil prices have risen in recent weeks in part because of heavy summer demand. Crude oil for October delivery traded at $29.52 a barrel yesterday, which was up 4.4 percent from a year ago, according to Bloomberg News. Prices could drop this month with the end of summer travel and before demand for heating fuel kicks in.
Matson said a $1 per barrel increase in bunker fuel, the heavy oil its ships burn, adds about $1.9 million to its annual cost. Matson raised its fuel surcharge to 7.5 percent in March, but cut it to 6.5 percent in May when fuel costs dropped.
Rising oil costs are also trickling down through the economy to boost prices for air travel and could effect electricity rates.
At Aloha Airlines, a $3 per leg fuel surcharge for interisland flights and $9 per trip charge for Mainland service instituted in the spring remains in effect to offset higher aviation fuel costs. Hawaiian Airlines also charges $2.79 plus taxes per passenger on each leg of interisland flights to cover higher fuel costs.
Despite a recent spike in petroleum product prices, a fuel oil cost pass-through charged by Hawaiian Electric Co. to customers has actually fallen since February, in part because the utility keeps a 30- to 45-day supply of fuel to run its power plants, which helps spread out the effects of temporary spikes in prices.
