IntegrityBC puzzled by BC Ferries’ claims on fuel surcharge

(Victoria, 26 November 2011) – IntegrityBC is calling on BC Ferries to justify its decision to double the fuel surcharge it imposes on travellers by releasing its weekly fuel costs for 2011 and committing itself to reporting these costs publicly in the future.

On Friday, the company announced it would double its surcharge on major routes beginning December 12th., claiming that the price for a litre of diesel in Tsawwassen had risen from 90 cents over the summer to $1.09 today.

IntegrityBC noted that while BC Ferries is doubling the surcharge, the price of diesel only rose by 20 per cent according to the company’s own numbers.

“While travellers begrudgingly put up with fuel surcharges as a fact of life, they shouldn’t be used as a cash grab just before the holiday season,” said IntegrityBC executive director Dermod Travis. “B.C. families deserve better.”

Based on the 2011 price range for West Texas Intermediate Crude, IntegrityBC also wonders whether using summer diesel prices in isolation from prices throughout 2011 provides an accurate picture of the company’s real fuel costs.

Large consumers of fuel traditionally account for weekly or monthly fluctuations in energy prices as part of their budgeting process and set prices accordingly, as BC Ferries did with fuel costs over a year ago.

According to BC Ferries’ 2010/11 Annual Report, the corporation forecast an increase in fuel costs from $50 million in 2004 to $120 million for 2012.

“It’s difficult to imagine that BC Ferries didn’t budget for short-term price fluctuations in this forecast,” said Travis. “Drivers already suspect that gas companies hike prices before long weekends to pad profits from increased travelling, but that doesn’t make it right for a company that serves British Columbians to play the same game on its customers.”