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Canada's Marine Atlantic Inc. has announced that it has significantly reduced its fuel surcharge, which had been initially introduced to recover sky-high bunker prices earlier this year.

The Newfoundland-based entity, which provides a constitutionally mandated passenger and commercial marine transportation system between the Island of Newfoundland and the Province of Nova Scotia, said that it would be slashing its fuel surcharge from 25.4 per cent to 9 per cent, effective immediately.

The fuel surcharge will be applied to the posted tariff rate for passengers, passenger vehicles and commercial vehicles.

Commenting on the decision, Wayne Follett, president and chief executive officer, said in a statement "While our next shipment of fuel is still a few weeks away, we are confident that based upon the current global oil market that we will pay less for our upcoming fuel delivery."

Marine Atlantic operates as a federal Crown corporation that reports to Parliament through the Minister of Transport.

The corporation provides ferry services on two routes. The first is a year-round 96 nautical mile daily ferry service between Port aux Basques, Newfoundland and Labrador and North Sydney, Nova Scotia. The second is a 280 nautical mile tri-weekly ferry service between Argentia, Newfoundland and Labrador and North Sydney, Nova Scotia. This service operates from mid-June until late September.

Marine Atlantic owns and operates four ice-class vessels to meet the traffic offering on these routes. Its three passenger vessels include the MV Leif Ericson, with a capacity to carry 500 passengers and approximately 300 passenger vehicles, and Canada’s two largest ferries: the MV Caribou and the MV Joseph and Clara Smallwood. Each of these larger vessels has a capacity of 1,200 passengers and approximately 340 passenger vehicles