Those Damn Fuel Surcharges

With oil prices high, attributed in good part to Russia's invasion of Ukraine, divers are affected not only by the increased cost of airfares but also by the fuel cost for dive operators. Day boat operators may just increase the cost of their dives, cancel trips when they have few divers (which is always annoying), or maybe not travel to better sites to conserve fuel.

Liveaboards can't increase current prices because they have already sold bunks and collected money as many as two years in advance. So, as many have in other years of increased fuel charges, customers get slapped with a fuel surcharge to keep their same fuel-eating itinerary. (Of course, when fuel prices drop, some stick with their surcharge.)

Randy Kettering, who headed off to Raja Ampat on November 3, got notified of a surcharge by his boat, La Galigo, but with it came a detailed and believable explanation.

"I am reaching out today to inform you that we have been financially forced to implement a fuel surcharge for your upcoming trip. As the war continues to roll on in Ukraine, here in Indonesia, we have seen a sharp increase in the cost of industrial fuel.

"Over the past five months, we have seen fuel prices move from U.S.$0.87 per litre to U.S.$1.54, and consumables such as food increase in cost by around 35%.

"With that in mind, for all La Galigo passengers on all trips in October 2022, there will be a fuel surcharge of U.S.$16 per person/per day. This equates to $192/person for the Ultimate Raja Ampat trip, $128/person for Raja North, and $144/person for Raja South.

"Considering . . . . that we froze our listed trip prices from 2020, I feel it necessary to make you aware that La Galigo is making zero profit on these third-party charges. The majority of other liveaboards in Indonesia are charging between $25 - $50 per person per day, but we do not wish to pass on such costs to our guests and are happy to shoulder some of the financial burden.

"I am sorry to be the bearer of bad news, but I do hope that you have a fantastic trip."

Randy says he has "no complaint" about paying the surcharge.

But, many divers don't feel that way, believing that a deal is a deal; they have a contract, have paid all or at least what is due at this point, and think it's unethical and illegal for an owner to change the price. One subscriber wrote us to say:

"My wife and I have been informed about fuel surcharges being added to two upcoming liveaboard trips, explained as necessary due to fuel price increases. One trip was fully paid (added cost is $225/person), the other added to our final payment ($100 per person).

"Nothing in our agreements provided for the expectation of additional charges. We all share an interest in a healthy and equitable diving industry, but the imposition of additional surcharges, I believe, will have a detrimental effect on the industry. I would expect that dive operators have budgets to account for swings in fuel costs that would preclude any additional surcharges when accepting reservations and payments.

"We certainly would not have expected any refund if fuel costs were to go down. In other words, there is a joint acceptance of risk.

"Clearly, additional surcharges are not being added after the fact for other types of travel, such as cruises and airlines.

"What is most disturbing is that these fuel surcharges were added after payment. This leaves us with no alternative other than to pay the added costs or forfeit the trip and money already paid for the reservation. Are the general concerns about inflation being used to increase our costs for these trips and for the industry overall? Is it common in the dive industry to add extra charges after agreements and payments are made?"

Both subscribers have valid points. One says you and I have a contract, and I expect you to keep it. The other says I understand your needs and what you're asking for isn't much given the cost of the trip.

I've been of both minds, but usually on the side saying "we made a deal, now keep it." But given that liveaboards have just suffered through a year, maybe two, of no business, one has to presume they have taken a financial hit. Had they built a reserve to cover future issues such as increased fuel, those reserves would have been depleted. Some are operating marginally. Many aren't traveling full, so there's less overall income. And, the jump in fuel costs in remote places is unexpected.

So, I'd presume that for now, my liveaboard owner is being honest with me, and I wouldn't complain (well, I might whine) about a surcharge. After all, on a trip that's going to add up to $7000 or more, $200 is less than three percent.

I'd pay the surcharge and expect my captain to keep the itinerary with no excuses about reaching faraway reefs. And besides, just try to enforce a contract with a liveaboard in Indonesia. There's not a chance.

- Ben Davison