Isle of Man Steam Packet Company dispures inflation figures

The Isle of Man Steam Packet Company is disputing inflation figures for the 12 months to July 2022 released by the Cabinet Office yesterday.

According to the July Report, inflation as measured by Consumer Price Index (CPI), stands at 10.8%, up from 9.2% in June 2022 and includes a 104% increase in sea transport prices during this period.

However, the Company believes the method used by the Cabinet Office to calculate sea transport increases is misleading given that no product fares (excluding fuel surcharge) had increased by more than 3.1% in the 12 months to June. Under the Sea Services Agreement, Standard Fares cannot increase by more than the published Manx CPI increase for August of each year. The Company confirmed it had advised the Cabinet Office of this matter.

The anomaly in the headline figures arises due to the comparison of the average price for June 2022, which reflected the high demand for TT 2022, with that of June 2021 when, due to Covid, traffic volumes were just 10% of 2022 levels.  As a consequence, the mix of fares was not representative of normal trading nor of typical average prices. 

The Steam Packet Company acknowledged that total fares had been affected by steep rises in marine fuel costs which had more than doubled since January, however, fuel surcharge increases of £2.25 for foot passengers and £1.50 for vehicles were a relatively small component of the total fare.

The Company also confirmed that it had absorbed an additional £2.5 million pounds of fuel costs to date, partly due to the Company holding TT 2022 bookings at 2019 price levels in order to retain TT business during the pandemic.