Steamship Authority governors will consider a reworked budget for next year, possibly including some fare increases to offset high fuel costs, when they meet on the Vineyard next week.
A draft budget at last month’s meeting was sent back to the drawing board after doubts were expressed about fuel cost estimates. The document assumed oil prices of $70 per barrel in 2008, about $10 lower than world prices at the time.
The $10 difference equated to almost $1 million in extra expense. It is likely the amended budget will include fare increases, although only on the Nantucket route.
Revenues for the Vineyard run appear sufficient to cover extra costs, but Nantucket residents could be faced with hikes.
Doubt about the budget parameters was raised last meeting by the Falmouth governor, Robert S. Marshall, of Falmouth, who said it would be short-sighted for the SSA not to budget more conservatively for fuel.
He urged the consideration of a fuel charge, similar to levies already imposed by many other transport operators, particularly airlines.
But after the board meeting boat line treasurer Robert B. Davis said he was inclined to look first at other areas to address any potential budget shortfall, including scheduling efficiencies or possible fare increases.
In the preliminary draft $80 million budget, Mr. Davis cited predictions that crude oil prices would fall during the remainder of this year, and would range between $60 and $72 per barrel in 2008.
“Currently, it is not anticipated that any rate increases will be needed,” he wrote in a staff summary.
Later he noted that some forecasters were predicting world oil price could be $85 during 2008. The new budget assumes $80.
The monthly boat line meeting will be held at 10:30 a.m. in the Oak Bluffs library meeting room.