Have you noticed the spike in global fuel prices? Who hasn’t?
What countless drivers are grumbling about on roads and highways worldwide is echoed by owners and captains on yachts and in harbors across the globe.
Sure, megayachts appear to be part of a recession-proof lifestyle, but no one likes to overpay for fuel, especially when it takes so much to power a superyacht. [Editor's Note: The August 2008 issue of Dockwalk magazine features a list of fuel prices from a selection of ports worldwide. Be sure to look for your printed copy shortly or read it soon in Digital Dockwalk online.]
Talk about a spike in fuel prices: $2.75 to $4.26 in Fort Lauderdale; $3.33 to $4.94 in St. Thomas; $2.85 to $4.35 in Gibraltar.
Cost-of-diesel-fuel increases like these, measured from just last December to early this summer – barely six months – are sending bunkering bills through the roof.
Around the globe, fuel prices have risen by a third – even a half – in most superyacht marinas and ports. And, according to those in the yacht fuel business, there’s no end in sight.
So, what’s a captain to do?
“Buy from me,” says Barnaby Skipwith of Yacht Fuel Services in England. “But seriously, there’s nothing you can do, right now. The market is going to do what the market is going to do. It’s out of our control.”
Gail Vanstone of Global Yacht Fuel in Fort Lauderdale agrees. Her description of the market, right now? “Volatile,” she says. “I never thought I’d see prices go up like this. It’s crazy.”
The search is on for bargain ports. But, as Vanstone points out, you can’t drive a megayacht between ports like a car, looking for cheap diesel. Still, for those planning itineraries, there are some ports with less expensive, if not necessarily cheap, fuel.
As of mid-summer, Mexico’s prices were still under $3 a gallon in Puerto Vallarta and Isla Mujeres, the cheapest in the western hemisphere with fuel coming from the country’s government-run oil industry.
In the United States, Fort Lauderdale, Seattle and Los Angeles were among the bargain ports with prices lower than $4.50 a gallon.
At St. Lucia, diesel was just less than $4 a gallon, but other island ports were among the most expensive. Nassau, The Bahamas checked in at just under $6 a gallon, St. Thomas was near $5.
In Canada, Halifax and Montreal both reported high prices well over $5 a gallon.
The same fluctuations exist in European waters, where several popular ports were coming in at more than $5 a gallon, including San Remo, Argostoli and Montenegro. Gibraltar, in contrast, had a posted price of $4.35.
Prices in the Med tended to be generally higher than other world ports. Malta was among the “bargains,” at $4.62 a gallon.
Compared to six months ago, there just aren’t any bargain ports today, says Vanstone. “There are some places where it’s less expensive, but you have to buy where you are. And prices not only vary so much, but they go up and down every day.”
And, if you do find a bargain to bunker, be careful. “With low prices, there’s always the question of quality,” says Vanstone.
Have soaring prices slowed involvement in and enjoyment of the yacht industry? Could soaring fuel prices spark a worldwide megayacht recession?
Neither Vanstone nor Skipwith sees it. “I don’t see that it’s had a strong effect on the market,” says Vanstone. “People seem to be going along as they always have been. And we’re still fueling charters.”
It’s going to take a while for prices to have an effect on people’s habits, says Skipwith.
“You may get people thinking about a charter, and they may decide not to this year,” he says. “But you know what, next year, they’ll say ‘I miss it; I’m going to do it again.’ All in all, I think the yachting market is a strong market. We might see a bit of a slowdown, but that’s all.”
Is there any end? Maybe. The fuel market is in a state of flux with new pressures on pricing. And it’s not just OPEC anymore.
Global oil demand from countries with rapid economic growth, such as China and India, are fueling the recent rise in petroleum prices. Speculators (commodities traders) in futures markets and other influences outside the market, such as aggressive environmental regulations, are also key players in the current energy crunch that’s being felt by the yacht industry.
Asked about the future, Vanstone says: “That’s not a question you can answer in a black-and-white manner. The general trend is all in the wrong direction.”
“We have to ride it out and see where we go,” adds Skipwith. “What choice do we have at the end of the day?”
Will rising fuel prices hamper the yachting industry? Let us know. Leave your comments below and be sure to vote in our interactive poll.