A cut in the fuel surcharge comes into force at the Steam Packet from today.

It's falling from ?5 per passenger each way to ?3.50.

For freight, the surcharge will reduce by 53p, from the current rate of ?5 per metre, to ?4.47.

The company says the revised rates will apply to new bookings from June 1.

The fuel surcharge is based on a formula agreed with the Department of Transport.

It reflects costs both before and after the review date, and is based 50 per cent on average marine fuel costs in the three months prior to review and 50 per cent on forecast costs for the three months ahead.

Future reviews under the new agreement will take place every three months.