Diesel costs leave island ferries facing million-kroner budget gaps

Rising diesel prices are pushing municipal ferry operators towards budget shortfalls as fixed-price fuel contracts expire, DR reports. On Samsø, the municipal operator may soon have to find up to 650,000 kroner a month to cover the impact.

The contracts have shielded ferry companies from steep fuel costs for years, but they are now expiring one by one. Lars Hansen, chairman of Småøernes Færgeselskaber, a ferry organisation, says operators are under pressure from the Limfjord to Læsø, Lolland, Funen and Samsø.

“It is happening almost everywhere,” Hansen said. “They have tried to protect their budgets with fixed-price contracts, but with the prices on the world market right now, they just keep going up. It is worrying.”

Many smaller island municipalities have little financial room to absorb the extra costs. They may have to reduce sailings, run ferries more slowly or raise ticket prices, Hansen said.

He warned that such measures could contribute to people leaving the Danish islands. “It would be a shame if thousands of years of people living on the Danish islands were undone by fuel prices spiralling out of control,” he said.

Many islands hope to replace diesel engines with battery-powered ferries, but the transition could cost hundreds of millions of kroner, making it difficult for municipalities to fund.

Hansen called on the government to suspend the CO2 tax for small ferries and create funding pools to help municipalities convert or build ferries for green operation. The Ministry of Towns, Land and Transport says it is working on a compensation scheme for municipal ferry operators to soften the worst effects.