Higher CO2 emissions tax pushes up fuel costs

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In the 1st quarter of 2017, the tax on CO2 and sulphur emissions is included in the cost index for the first time. The increase in the tax on CO2 emissions in 2017 made a particular contribution to the rise in fuel costs.

Since the 4th quarter of 2016, the sub-index for fuel costs has increased by 16.7 per cent, ending at 116.7 in the 1st quarter of 2017 (2016 Q4=100). Over the last 12-month period, the cost of fuel for vessels in domestic sea transport has risen by 76.3 per cent. The increase in taxes on fuel and the low fuel prices in the 1st quarter of 2016 and high prices in the 1st quarter of 2017 contributed to the dramatic growth in the sub-index for fuel from the 1st quarter of 2016 to the 1st quarter of 2017.

For more information about taxes on CO2 and sulphur emissions, see the website of the government (in Norwegian).

High cost growth for all vessel types

The sub-indices for all types of vessels increased in the 1st quarter of 2017 compared to the previous quarter. Other cargo ships and large passenger boats experienced the relatively largest rises among the different types of vessels, increasing by respectively 4.1 and 4.3 per cent.

The total cost index for operators of vessels in domestic sea transport went up by about 3.8 per cent from the previous quarter, and ended at 103.8 (2016 Q4=100). This represents a year-on-year increase of 12.3 per cent.

Changes in cost the index for domestic sea transport

Some changes have been introduced in the cost index from the 1st quarter of 2017:

  • The sub-index for fuel costs now includes the taxes on CO2 and sulphur emissions. Other relevant fuel taxes on marine fuel, for example the tax on NOx emissions, are not included in the cost index.
  • Up to this quarter, the costs of crew have been total expenses related to seamen in the shipping company, excluding overtime work and bonuses. From this quarter and onwards, the crew costs will include more cost components for crews. The extra components include overtime, holiday pay, bonuses and regular and irregular additions to wages.
  • The sub-index for other operational costs has been measured using the consumer price index (CPI) up to this quarter. From this quarter and onwards, the sub-index will be measured using the consumer price index excluding energy products (CPI-AE).
  • Up to this quarter, the financing costs have been measured using a nominal NIBOR interest rate adjusted for changes in the consumer price index (CPI). From this quarter and onwards, the nominal NIBOR interest rate will be adjusted for changes in the consumer price index adjusted for tax changes and excluding energy products (CPI-ATE).

From the 1st quarter of 2017, Statistics Norway will also publish sub-indices for all vessel types without the fuel component. These can be found in Statbank table 11586. For a more detailed description of the changes in the cost index this quarter, see “About the statistics”.

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