Fueling Debate

Guests onboard Fred.Olsen's Balmoral.

Photo © 2009 Aaron Saunders 

Anyone who set foot on a cruise ship in 2008 remembers two words that stuck fear into their hearts: fuel surcharge.  With the price of crude oil hitting record highs, lines were forced to being charging a per-passenger, per-day fee in order to recoup some of their expenses.  While these fuel surcharges were capped at a maximum rate (especially important for people on longer voyages), it was still more money out of passenger's pockets.

Despite the fact that lines suspended the fuel surcharge in early 2009 in response to retreating prices, they have retained the ability to re-instate the surcharge at any time should the price of oil exceed a certain amount - commonly $75 per barrel on the NYMEX.  The price has passed that point for some time now, but so far, the cruise lines have resisted reinstating the charge, preferring to cut costs by reducing overall vessel speed and eleminating or reducing itineraries requiring large cruising distances between ports.

On April 23rd, however, UK-based Fred.Olsen Cruise Lines became the first line other than Disney Cruise Line to re-instate their fuel surcharge

Beginning with new bookings made on or after May 5th, the line will tack on £3 per person, per day, up to a maximum of £60 per person, per cruise, for the first two guests.   Additional guests sharing the same stateroom will be charged £1.50 per person, per day, to a maximum of £30 per person, per cruise.

The line also noted that should the price of Brent Crude fall below £45 per barrel, averaged in the month prior to departure, the surcharge would be refunded to guests in the form of an onboard credit.  Give that the price of Brent Crude closed a touch over £56 per barrel, it seems unlikely - but not unheard of - that the surcharge will be recalled anytime soon.

While not great news for Fred.Olsen passengers, they can count themselves lucky one one point: they were paying more back in 2008 than they are under the new fuel surcharge.  On May 1, 2008 - almost two years ago to the day - Fred. Olsen announced their fuel surcharge would be £3.50 per guest, per day, to a maximum of £70 per guest, per cruise. 

At this point in time, no other lines have announced similar plans - though as is usually the case, once one card falls, the rest of the house can't be far behind.

We will keep you updated on this as more information becomes available.  In the meantime, our best advice for cruisers is to plan and budget for a possible fuel surcharge to be added to their bookings, and be glad when it doesn't happen.