Matson Navigation Co. yesterday announced that beginning March 11 it will increase its fuel surcharge in its Hawai'i, Guam and Micronesia services from 17.5 percent to 19.5 percent.

It will be Matson's first increase since June 2006 and the highest since October 2006 when the fuel surcharge was 19.75 percent.

"While Matson experienced steady declines in fuel prices in late 2006 and early 2007, allowing us to make three consecutive downward adjustments, current trends have increased our fuel costs by over 15 percent," said Dave Hoppes, senior vice president, ocean services.

"Fuel consumption is an unavoidable and significant component of our operating costs, with every dollar increase per barrel adding over $2 million in annual expenses," Hoppes added. "We will continue to monitor fuel costs and adjust the fuel surcharge accordingly."

Matson is a wholly owned subsidiary of Honolulu-based Alexander & Baldwin Inc.