Fuel-Guzzling Ferry Fares
Rarely has the Vineyard paid such close attention to the price of crude oil as in recent weeks. Through the eyes of the Steamship Authority, which has been preparing its final budget for the coming year, Islanders have watched the price of oil climb from seventy dollars a barrel to eighty, topping out this week at ninety dollars a barrel.
With eight per cent of its seventy six million dollar budget devoted to fuel costs, boat line senior managers must play a sophisticated game of guesswork with a sharp eye on OPEC as they develop a budget each year. An increase in ten dollars a barrel translates to a million dollars in added cost for the boat line.
The managers had solved one problem — a ten dollar increase in the price of oil between preparation of a preliminary budget and a draft final budget will result in a modest rate increase on the Nantucket run. Meanwhile, no increase was contemplated on the Vineyard run.
When the price went up again just before the monthly meeting on the Vineyard this week, additional rate increases came up for discussion. The five governors balked. A rate increase on the Nantucket run was fine, they said, but they held the line on any other increases, deciding instead that any loss must simply come off the bottom line.
The matter is due for reconsideration in January and now governors are discussing the possibility of fuel surcharges.
Fuel surcharges are just another way to increase rates with the added downside that they increase the bureaucracy. Think about your electric bill — who can decipher all those fuel surcharges, and more to the point who wants to?
And fuel surcharges never really go away; they are just rolled into the total cost at some point.
The boat line which is the lifeline to the two Islands operates without state or federal subsidy. And all budgets are simply best-guess estimates based on a snapshot in time. And thanks to sound, conservative management led by general manager Wayne Lamson the boat line enjoys a comfortable annual surplus, projected at just under four million dollars in the coming year. The extra money is plowed immediately back into the boat line in a series of special reserve funds set out by the state statute which created the Steamship Authority in 1960.
Mr. Lamson worries about having enough money for the capital spending fund, while the governors worry about protecting the rate payers who are their constituents. Both are right and must meet in the middle.
But fuel surcharges should be dropped from the discussion.