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Low fuel costs, Discount!!


sodsmom
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I would just like to bring attention to the fact that when fuel prices have increased in past say 20% that cruise lines have added a surcharge to cover this increase

Well now that fuel prices have dropped by close to 50% where is the discount?

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All though cruise lines may have raised fares, not one US-based cruise line I know of has imposed the fuel surcharge typically permitted by the passenger contract in the past 5 or 6 years. (Cunard did...but they're based in the UK).

 

Cruise lines (as well as airlines) have various fuel contracts bought to hedge against the rising cost of fuel. If the price of a barrel of oil declines $10, that doesn't mean the cruise lines' (or airlines') costs immediately decline $10. Those same hedging contracts that protect against oil price increases also lock in higher than current market prices when the cost of a barrel of oil declines. As a result, depending on the contracts, it can take some time for the market price declines significantly impact the price the cruise lines' pay.

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I too would like to see where anyone was charged a fuel supplement even when oil was over 100 a barrel... I was never charged any such supplement...

 

A few years ago...I did have it added to my account...and a few months later it was removed..when prices fell.

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A few years ago...I did have it added to my account...and a few months later it was removed..when prices fell.

 

It had to be at least 5 or 6 years ago...maybe even longer. The US-based cruise lines stopped doing it because they realized it was less noticeable to passengers to just raise base fares a few dollars a day rather than add a separate surcharge. Also when they started hedging they protected themselves again sudden increases in the market price of fuel that weren't anticipated when fares were set.

Edited by njhorseman
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In the past 5 years, when oil has been considerably above $65 a barrel, I am not aware of any fuel surcharge being added to our fares as was the company's prerogative. Therefore, there's not legitimate reason to expect a fuel surcharge refund on future cruises. Fares will continue to reflect supply and demand. That would be to try and never operate a cruise below cost, and when possible due to demand, operate a cruise as much above cost as the market will allow.

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The North American Emission Control Area (ECA) regulations went into effect on January 1, 2015 and cruise lines must use low-sulfur fuels or invest in expensive scrubber technology to ensure the ships exhaust meet the new low sulfur emission standards. For the full story, see: http://www.cruisecritic.com/articles.cfm?ID=1700

 

If there is going to be any movement on cruise prices, it is more likely to be a price increase due to the requirements of the ECA.

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It had to be at least 5 or 6 years ago...maybe even longer. The US-based cruise lines stopped doing it because they realized it was less noticeable to passengers to just raise base fares a few dollars a day rather than add a separate surcharge. Also when they started hedging they protected themselves again sudden increases in the market price of fuel that weren't anticipated when fares were set.

 

It may have been that long....I don't remember exactly when..but I do remember calling them when I saw that it was no longer being added..and thus asked it be taken off...;)

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If they ever do offer a discount or lower fares, it won't happen for awhile. It's just like airline fares haven't gone down. It takes MUCH longer to see a price difference in fuel for planes and ships because they buy it so far in advance.

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An article I read put it really well. It related to a very popular, well known coffee chain and how when the underlying source (coffee beans) goes up, then in turn coffee prices go up. But when coffee bean prices go down, no one expects coffee prices to decrease as well. And much like airlines, there are futures and hedges bought on these commodities. It's more in the supply and demand that will drive the price. So I wouldn't expect cruise fare or airfare to drop until the demand drops.

Edited by nfglory1
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