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Cruise Fuel Rebates About to Kick In?

Written by: Paul Motter

Carnival Corp. announced fuel supplement rebates if the price of oil is $70 or less for 25 days in a row. It has been 15 days. To be exact, the company said you will get a full refund on your fuel supplement payment if the price of oil is $70 or less for 25 days in a row at the 2:30 p.m. close of business on each of the 25 consecutive trading days ending five trading days prior to the your cruise departure date.

OK, that is complicated, but according to my charts the price of light crude closed below $70 on November 5 and has stayed below that price ever since. This means that 12 trading days have passed with the price below $70/barrel.

Since the price is now at $49.62/barrel, I contacted Carnival to see if they are tracking this and they confirmed that if the price stays below $70 then they will start giving discounts starting with the December 18 cruise sail dates.  By the way, I originally saw that the price closed below 70 on Oct 21, which would have meant the cutoff date was Dec. 1st. But it did close above 70 for ONE DAY on November 4 setting the deadline back by three weeks  – because weekends are not counted.

This is a significant onboard credit, equal to the fuel supplement they charged these customers. The supplement was $10 per person per day. In other words, the onboard credit should equal $140 per couple for every 7-day cruise.

Furthermore, while Carnival has suspended the fuel supplement for cruises departing in 2010, they are still charging it for all cruise sold that sail in 2009. However, based on the current economic situation it appears to me a reasonably safe bet that a cruise you book now for 2009 will very likely qualify for the onboard credit.

In other words, while you will still have to pay the fuel supplement for any 2009 cruise, there is a very good chance you will get it back in the form of an onboard credit on the day you cruise. Remember, the price of oil has dropped below $50/barrel for the first time today, actually trading at $49.62 as I write this. That means it has dropped about 27% since the day it first dipped below $70 barrel. Nothing in this economy has gone UP 27% in the last few months, so it is pretty good bet you will get your rebate.

If you don’t it probably means our economy has improved significantly, and that is also good news. Either way you win. Naturally, the only reason why this shouldn’t remain true for an extended period of time will be if the price of oil creeps back up, or if (Heaven forbid) somekind of cosmic event should push the price of oil up overnight.

This is great news for cruisers – you can effectively take away the fuel supplement from the total cost for any cruise sailing after December 18 st, although you will pay it, you will get it back in the form of an onboard credit.

This will apply to all Carnival Corp cruise lines: Carnival, Holland America, Princess, Cunard, Seabourn and Costa.

Royal Caribbean and NCL have a different approach from Carnival – but surprisingly similar to each other. They are charging no fuel supplements for any cruises departing in 2010. If you book a cruise leaving in 2009, then know that they plan to check the price of oil quarterly to see if fuel surcharges will apply, and whether or not people who pay them will get rebates.

Here is the chart of the date they check the price of oil. If it is below $65 when they check it, then for cruises in the time frames in column number 2 will not be charged when you book, or if you have already booked and paid a fuel surcharge you will recieve a rebate in the form of an onboard credit:

Fuel Price Determination Date        Quarter of Possible Fuel Supplement Refunds
December 18, 2008                        First quarter 2009

March 18, 2009                             Second quarter 2009
June 17, 2009                               Third quarter 2009
September 17, 2009                       Fourth quarter 2009
December 18, 2009                        First quarter 2010
March 18, 2010                              Second quarter 2010
June 17, 2010                                Third quarter 2010
September 17, 2010                        Fourth quarter 2010

As noted, the price of oil is under $50/barrel today, so the chances of it going above $70 or $65 again anytime soon are remote, it COULD happen, however. December 18th is a good day to check in and see what the state of fuel supplements will be – that is the date they will end for Carnival for the first time, and that is the first “check-date” for Royal Caribbean.

UPDATE: Some market people are saying oil is oversold and that the price could come above $70/barrel again in the next two weeks. If it does then Carnival will NOT be offereing the promised discounts. If it is above $65/barrel on December 18 then RCL and NCL will put off their rebates until after the first quartter of 2008, minimum.

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Comments

Comment from arie plugge
Time November 24, 2008 at 12:33 am

we don’t know if we paid the oil tax we have booked a will ago so then was now oil tax. if we didn’t paid how did works then we are leaving february 9 from frt Lauderdale and we like the way we have by Carnival Cruise Line they make our life so good and will thank this company. with or without oil tax.

Comment from Paul Motter
Time November 25, 2008 at 3:44 am

Chances are that you DID pay the supplement fee, if you booked in the last year or so. I am sure they will tell you if you did, because almost everyone on the ship should be getting the same onboard credit.

Just ask them “do we qualify for the fuel supplement onboard credit?” when you get on.

Comment from Kathy
Time November 25, 2008 at 1:37 pm

This should be very interesting. We are already booked on Carnival for Sept 21, 2009 with the fuel supplement charge. I’m wondering if they will offer me that on board credit now or maybe if I pay off our second cabin by February

Comment from Clint
Time December 8, 2008 at 9:44 pm

I sail on Dec 14th. Even if I dont count weekends or thanksgiving or should easliy make the 25 days prior here. Should I expect this refund too? I was told a couple weeks back by Carnival I would get an onboard credit on my cruise. Has that changed? Do you have the original anouncement as Carnival has changed it on their website. Thanks!!

Comment from Paul Motter
Time December 9, 2008 at 8:35 am

I do not think you will get one – sorry, Carnival last week officially set the date a December 17 when they would start offering credits. Sorry!

As fuel prices continue to decline, Carnival Corporation has announced that it will suspend fuel supplements for its six North American brands effective for all voyages departing on or after December 17, 2008.

The fuel supplement suspension applies to the following brands: Carnival Cruise Lines, Costa Cruises, Cunard Line, Holland America Line, Princess Cruises and The Yachts of Seabourn.

A refund of the fuel supplement will be made in the form of a shipboard credit for all bookings within the final payment period for departures on or after December 17, 2008. All bookings outside of the final payment period for departures on or after December 17, 2008 will be adjusted to remove the fuel supplement and guests will be provided with a revised final payment amount.

“As the price of oil has dropped to $46 per barrel, it has now reached a level where we are able to suspend the fuel supplement,” said Bill Harber, director of marketing for Carnival Corporation & plc. Harber cautioned that the fuel supplement could be re-instated if oil prices increase significantly.

The company reserves the right to re-instate the fuel supplement for all guests at up to $9 per person per day (except Seabourn, which would be up to $15 per person per day) should the price of light sweet crude oil according to the NYMEX (New York Mercantile Exchange Index) increase above $70 per barrel.

“It is our hope that fuel prices have stabilized and will remain at a more rational level. The complete suspension of the fuel supplement makes the inherent value of a cruise even greater and that is increasingly important in the selection of a vacation in the current economic climate,” Harber added.

The fuel supplement for five of the six Carnival Corporation & plc brands is currently $9 per person per day for the first and second guest (not to exceed $126 per person per voyage) and $4 per person per day for third, fourth and fifth guests (not to exceed $56 per person per voyage). Seabourn’s fuel supplement is $15 per person per day for the first and second guest (not to exceed $210 per person per voyage) and $4 per person per day for third and fourth guests (not to exceed $56 per person per voyage).

Comment from Rebecca
Time December 11, 2008 at 10:52 pm

I am booked on carnival and I printed the original carnival notice stating that if the price stayed below the 70.00 per barrel we would get the credit. I am to sail 12/14/08 is was not stated that it woul effect only after dec 17th. I will print all material and talk to them on board. I would consider it false advertising if they do not allow it since the original notice was dated in October and stated “25″ business days below the 70.00 I hope I am not let down

Comment from Chuck
Time January 2, 2009 at 4:37 am

I sailed on the Valor 12/14/08, and there were many cruisers disappointed because they had been told to expect the on board credit, but did not get it. I personally talked to at least 6 other groups that were “bilked” out of that money by shoody sales prctices by Carnival agents. Other people I talked to said they already received a credit or refund. The difference is they went through travel agents, not Carnival.

Comment from Paul Motter
Time January 2, 2009 at 7:38 am

I don’t know how so many people got the idea they were entitled to the rebate. The cutoff date to end supplements was December 17th. I think a lot of people thought the company would be magnanimous and give them back earlier than they announced and the rumor became expectation.

The truth is – they announcd when they created the supplements what the rules were for removing the supplements and they followed the rules they create.

25 days of TRADING below $70/share plus five days would be the day they started rebares, and that worked out to Dec. 17.

It doesn’t matter whether you used an agent or Carnival.

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