Coastal shipping companies pressured by increased cost of new fuel

Greek coastal shipping companies are concerned by a new increase in the cost of maritime fuel from January 1, 2020 after the implementation of a new regulation by the International Maritime Organisation -IMO- and are discussing ways to deal with the new situation. Coastal shipping executives told the Athens-Macedonian News Agency that the additional burden approached 25 pct and did not rule out an increase in shipping fares by 7-10 pct.

Shipping executives underlined that coastal shipping companies could not roll over the whole cost of this increased burden to passengers, particularly during the winter season when traffic is reduced, but noted that a discussion on increasing fares in the next few weeks could be deemed necessary by company managements seeking to contain their losses from using the new fuel. The executives said that the price per tonne of the new fuel was around 575 euros so far this year, significantly up from 450 euros for purchases made until December 31, 2019.

Coastal shipping owners have asked for a meeting with the shipping minister to discuss the issue and have requested a reduction of VAT rates to offset their higher costs. Ministry sources told ANA that Shipping Minister Yiannis Plakiotakis has forwarded this request to the finance ministry but noted that it could be difficult to reduce VAT for coastal shipping without extending the reduction to all other means of transport, noting that this could have an increased cost for the state budget.

According to the new IMO regulation, ships can still use the old type of fuel as long as their engines are fitted with scrubbers. The cost of installing scrubbers, however, can reach around 5.0 million euros. Minoan Lines has already completed the installation of scrubbers on its ships and Attica Group is expected to install this technology on some of its fleet.