Your ferry ticket these days is like Russia as described by Sir Winston Churchill: “a riddle wrapped in a mystery inside an enigma.”
It jumped 3.5 per cent this week because of the sudden imposition of a fuel surcharge, the result of a series of complicated factors.
One of them is the price of diesel fuel. Oil prices are a mystery unto themselves, far beyond the comprehension of most people.
Related to that mystery is the pump price of gasoline.
And folded into that conundrum is the price of diesel, which seems to float at its own level, independent of the price of regular gas. (The retail price is 25 cents a litre higher than regular at the time of writing.)
Ferries run on marine diesel, which is a separate grade that involves additional complexities.
Over the 10 years the ferry system has been running as a stand-alone entity, a system has evolved to deal with fuel prices.
But it’s just as complicated as the fuel prices themselves.
The independent ferry commissioner watchdogs most of B.C. Ferry Services’ accounting practices. It is designed to hold the corporation to account over the length of each multi-year performance term.
Part of that process requires the company to estimate its fuel costs several years into the future. If they overestimate, the legislation requires the company to return the amount to users in some fashion.
If they underestimate, the system allows the company to impose a fuel surcharge to cover the shortage.
The company underestimated the price this time around.
It wrote the commissioner last month trying to explain the situation. “Notwithstanding the recent easing of retail gasoline prices at the pump, diesel prices have not abated in the same fashion.”
The letter stated that in the current fiscal year B.C. Ferries has been paying an average of $1.05 a litre for marine diesel. But it had estimated 95 cents a litre, so “the debit balance in the fuel deferral account is growing.”
The deferral account was set up to provide some leeway in the calculations, by allowing some time to pass for the fluctuations to balance out.
But the auditor general cast a leery eye on deferral accounts a few years ago.
The system in place with B.C. Ferries requires the account to balance out to zero every two years, so it doesn’t run too deeply into the red.
B.C. Ferries said that since March, 2013, the account has swung from a credit of $1.5 million to a debit of $3.5 million. And since it’s currently paying 10 cents a litre more than it budgeted every day, it’s getting worse.
That’s why the Swartz Bay-Tsawwassen car-and-driver fare jumped $2.25 on Friday.
There’s an equally complicated structure for the basic ticket price. It caps the average price systemwide at a set amount and requires adjustments depending on performance. Performance this year indicates that a small fare break will be coming before March.
A discount coming after a surcharge is going to confuse people. So B.C. Ferries wants permission to move “excess” revenue into the fuel fund, so the fares don’t jerk up and down so much. Even if that’s approved, another routine fare hike of four per cent is set for April 1.
So the ins and outs are quite murky, but the trend is pretty clear. It points up, up, up.
Just So You Know: A reminder: The toast to mark the anniversary of Sir Winston Churchill’s death is Sunday at 2 p.m., at the tree he planted in Beacon Hill Park, at the foot of Quadra Street.
