The state's three largest ocean shippers are lowering their fuel surcharges as softening demand continues to push down bunker fuel prices.

Matson Navigation Co. and Horizon Lines Inc. both announced yesterday that they would slash by 4.5 percentage points - or 12 percent - their fuel surcharge to 33 percent from 37.5 percent for Hawaii service routes on Sunday. Pasha Hawaii Transport Lines is cutting its rate by 4.5 percentage points - or nearly 12.9 percent - to 30.5 percent from 35 percent on the same day.

The reductions will aid many businesses already tightening their belts in the down economy.

“;It helps us to be competitive and keep our prices down, although we have already absorbed most of the recent fuel surcharge increases and not passed those increases on to customers,”; said Carol Ai May, City Mill Co. Ltd. vice president. “;All of this helps in an increasingly difficult Hawaii economic environment.”;

It is the second time in less than a month that rivals Matson and Horizon have reduced the fee, after nine consecutive increases since lowering the rate in January 2007. The companies cut the levy on Sept. 21 by 4.75 percentage points - or 11.2 percent - the largest percentage-point reduction since the surcharge was implemented nearly a decade ago.

Pasha also lowered its surcharge on Sept. 21 by 4.75 percentage points to 35 percent from 39.75.

Matson also is decreasing the fee by 4.5 percentage points - or 11.5 percent - to 34.5 percent from 39 percent the same day for its Guam/Commonwealth of the Northern Mariana Islands and Micronesia service.

“;Following an extended period in which oil costs hit historical record highs, it is encouraging to see this downward trend continue to be reflected in the prices the company is now paying for bunker fuel,”; said Dave Hoppes, Matson's senior vice president for ocean services.

Matson said it would pass on the decrease earlier than the typical 30-day notification period so that customers can more quickly see the benefits. The company estimates that most customers will see a decrease in shipping costs ranging from $110 to $170 per container.