Chamber Survey Shows Major Business Concern about Steam Packet Fuel Surcharge

Isle of Man Chamber of Commerce has published the results of a member survey about the impact of the Steam Packet Company’s fuel surcharge.

88% of respondents report a negative business impact from the surcharge. 51.7% describe a significant cost increase that will affect their pricing or margins, and 15.5% say the impact is severe enough to threaten business viability or growth. 48% of respondents say they will pass the cost on to customers, either fully or in part, while a further 19% will reduce costs elsewhere, including staffing. Chamber says this means the surcharge will be another inflationary pressure that will be felt across the Island's economy.

Respondents described a wide range of specific impacts, particularly increased freight costs. The survey results are also backed by anecdotal evidence received by Chamber from its members and the wider business community. An agricultural business highlighted the added pressure on the already high cost of importing essential animal feeds and fertilisers. A dental practice warned that suppliers may stop delivering to the Island entirely, threatening healthcare provision. A small food producer described the surcharge as potentially devastating to their ability to compete in the UK market. A care charity warned of increased isolation and loneliness among vulnerable people if their home services become unaffordable.

Respondents stated they would like to see government prioritising intervention or mitigation (selected by 69% of respondents), a formal review of the fuel pricing and surcharge mechanism (64%), and greater clarity about how the surcharge is calculated and reviewed (60%). Not a single respondent selected no action required.

Chamber's Connectivity Forum has also been informed that one of the airlines that serves the Isle of Man has introduced a banded fuel surcharge across its network, structured according to route length. Isle of Man passengers travelling to short-haul destinations and those travelling to long-haul UK cities will face different levels of additional cost on return journeys. This indicates that rising fuel costs are now a cross-modal connectivity issue for the Island, affecting both sea and air services.

Chamber recognises that the Steam Packet Company is operating in a challenging environment and that the surcharge reflects genuine fuel cost volatility. However, as the owner of the Steam Packet Company, Government has the power to assess the wider economic impact and to consider what steps may be appropriate. Chamber will be writing to Government to share the survey results and anecdotal evidence from businesses, and to request a meeting.

Chamber is asking Government to consider three action points as a matter of urgency:

1. To provide clear and regular public communication about how the surcharge level is set and how it will be reviewed as fuel markets change.
2. To assess whether targeted subvention of the surcharge, even in part, represents a cost-effective way of protecting businesses and consumers from broader inflationary pressure across the Island.
3. To consider whether additional support is needed for the sectors most acutely affected, including hospitality, agriculture, healthcare and the charity sector.

The Isle of Man Steam Packet Company is 100% Government-owned. That means Government has the power to control the degree to which increased costs are passed on to businesses.

A full analysis of survey findings and background research can be found here.