Greek ferry fares may increase by as much as 10 percent in the coming period in view of rising fuel costs following the implementation of IMO 2020, the International Maritime Organization’s (IMO) low sulphur regulation.
IMO 2020 took effect on January 1 with very low sulphur fuel oil (VLFSO) prices having surged in the meantime. The regulation, aimed at reducing air pollution by requiring that all ships use the reduced – but more costly – sulphur fuel (from 3.5 percent to 0.5 percent), is set to raise operating costs by 25 percent.
To address the increasing costs, the Greek government amended the current regulatory framework allowing coastal shipping operators to hike fares if necessary.
In view of the new regulation, coastal shipping operators said they may be forced to increase ticket prices by 7 to 10 percent, noting however that this can be avoided if the government agrees to slash VAT on fares, currently at 24 percent.
At the same time, ferry operators are noting that price hikes should not be passed on to the passengers – mostly Greek island inhabitants – particularly during the winter period. It should be noted, that the first quarter of the year is always lossmaking for ferry companies operating ships in the Aegean and the Ionian seas.
In the meantime, Greece’s coastal shipping fleet is getting older with the average age of its vessels at 26 years, requiring investments for renewal, a shipping report released last year revealed.