The drop in jet fuel prices has prompted the Civil Aeronautics Board (CAB) to reduce the passenger fuel surcharge airlines operating in the Philippines may collect from September to October 2019.
In an August 15 advisory, CAB executive director Carmelo Arcilla said jet fuel from June to July averaged US$78.54 per barrel, equivalent to P25.29 per liter at an exchange rate of P51.19 per dollar. This is lower than the $82.96 per barrel (P27.24 per liter at an exchange rate of P52.19 per dollar) in April and May.
The lower price falls within Level 2 of the passenger fuel surcharge matrix for domestic and international flights under CAB Resolution No. 44 issued in September 2018.
Level 2 rates range from P45 to P171 per passenger on a domestic flight (one way) and from P218 to P2,076 per passenger on an international flight (one way).
Resolution No. 44, which reimposes the collection of fuel surcharge from passengers on domestic and international flights, states the applicable fuel surcharge will be determined based on the two-month average of jet fuel Mean of Platts Singapore priced in its peso-per-liter equivalent, and will be fixed for two months. This will be the ceiling rate for the fuel surcharge.
If the two-month price average of jet fuel per liter falls below P21, no fuel surcharge will be collected.
The applicable fuel surcharge will be evaluated every two months and announced 15 days prior to its effectivity, in keeping with the timetable under Resolution No. 44.
Resolution 44 notes that airline fuel surcharge is an optional fee airlines may impose to recover fuel costs and stem losses caused by a spike in fuel cost.