Young Brothers Ltd., the state's largest interisland barge company, announced yesterday that it plans to increase its fuel surcharge on March 4 because of rising fuel costs.

The company said the higher fuel surcharge, which will range from 2.5 percent to 3 percent, is necessary because fuel costs have increased nearly 22 percent over the past six months. Glenn Hong, Young Brothers' president, said the amount of the increase will be determined at the end of the month. The new surcharge will replace the fuel surcharge of 1.29 percent that has been in effect since Dec. 4.

"Once the costs and revenues for the period ending Feb. 29 are received, we will determine the actual (fuel price adjustment) ... for our customers," Hong said in a statement. "We are continuing to streamline our operations for efficiency, but do need to acknowledge these hefty fuel cost increases."

The increase could lead to higher prices for consumers on the Neighbor Islands and higher costs for farmers shipping refrigerated produce to Honolulu.

This will be Young Brothers' second fuel surcharge increase since the Public Utilities Commission approved the implementation of a fuel price adjustment clause for the company in October 2007. Before the clause was approved, Young Brothers was required to obtain PUC approval for an increase in its fuel surcharge. Now, it simply has to file a notice of increase with the PUC.

Matson Navigation Co. and Horizon Lines are not regulated by the PUC and are allowed to automatically pass along fuel price increases to their customers.