Treasury Minister Chris Thomas has confirmed the Isle of Man Government is not currently considering any direct intervention to subsidise or offset the fuel surcharge applied by the Isle of Man Steam Packet Company.

It was recently announced the Steam Packet would introduce a 25% increase in its freight fuel surcharge, which came into effect on April 1.

Responding to questions during Tuesday’s House of Keys sitting, Mr Thomas said that while government was ‘considering options’ to support households and businesses amid wider energy price volatility, any measures would need to be ‘targeted and fiscally responsible’ in line with previous comments from Chief Minister Alfred Cannan.

However, he made clear that ‘at present, we are not considering directly intervening by subsidising or otherwise directly offsetting the fuel surcharge’.

He added: ‘The fuel surcharge rebate is an additional amount added or taken away from the Steam Packet’s regulated fares governed by clause nine of the Sea Services Agreement.

‘The Sea Services Agreement is between the Department of Infrastructure and the Steam Packet, so does not require either party to consult with or gain the approval of Treasury.

‘As a result, Treasury has not undertaken formal discussions with either.’

During the sitting, members raised concerns about the impact of rising ferry costs on local businesses and questioned whether government had considered intervening sooner.

Mr Thomas also acknowledged concerns raised by the Chamber of Commerce, whose recent survey found around 70% of respondents supported government intervention.

‘I acknowledge the concerns raised by the Chamber and can confirm that the government is considering options around how to support households and businesses,’ Mr Thomas added.

‘We will ensure that robust, proportionate contingency plans are in place.’

Following the Chamber of Commerce survey, several Isle of Man businesses said the increase had already led to ‘a significant cost increase that will affect their pricing’,

One respondent said the surcharge was ‘another blow to the hospitality industry’, while an unnamed agricultural business pointed to ‘extra cost of essential imported animal feeds and fertilisers’.

A small food producer described the impact as ‘pretty devastating’, warning they may not break even on exports, while a dental provider said suppliers ‘may stop delivering to the island entirely’.

A spokesperson from the Chamber said: ‘We recognise that the Steam Packet is operating in a challenging environment and that the surcharge reflects genuine fuel cost volatility.

‘However, as the owner of the Steam Packet Company, government has the power to assess the wider economic impact and to consider what steps may be appropriate.’

Asked what impact the increase had made on its operations, a spokesperson from local freight company Transmann Ltd commented: ‘We currently operate with a fuel surcharge that is revised monthly and adjusted accordingly.

‘The Steam Packet’s increase and the massive hike in the price of road fuel due to the war in the middle east is something we can’t absorb, so our fuel surcharge has had to be increased significantly to accommodate this additional cost.

‘It is being monitored and hopefully it won’t be too long before things settle back down.’