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Airfares are expected to rise as the Civil Aeronautics Board upgraded the passenger fuel surcharge airlines may charge from March to April 2022
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This follows the continuous increase in jet fuel prices
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Surcharge rates range from P108 to P411 per passenger on a domestic flight (one way) and from P543 to P5,026 per passenger on an international flight (one way)
Airfares in the Philippines may rise following the upgrade in passenger fuel surcharge due to high jet fuel prices.
In an advisory dated February 15, the Civil Aeronautics Board (CAB) upgraded to Level 4 the passenger fuel surcharge airlines may charge from March to April 2022.
From December 2021 to January 2022, the price of jet fuel averaged US$95.34 per barrel, equivalent to P30.43 per liter at an exchange rate of P50.75 per dollar, CAB executive director Carmelo Arcilla said in the advisory.
The latest rate falls within Level 4 of the passenger fuel surcharge matrix for domestic and international flights under CAB Resolution No. 46.
Under this level, the fuel surcharge ranges from P108 to P411 per passenger on a domestic flight (one way) and from P543 to P5,026 per passenger on an international flight (one way). This is the highest surcharge rate since CAB announced its reimposition in July 2021.
Resolution No. 46 states that the applicable fuel surcharge is determined by the two-month average of jet fuel Mean of Platts Singapore (the average of a set of Singapore-based oil product price assessments published by Platts) priced in its peso-per-liter equivalent, and fixed for two months.
The two-month price average is the ceiling rate for the fuel surcharge.
The applicable fuel surcharge is evaluated every two months and announced 15 days prior to its effectivity, in accordance with the timetable in Resolution No. 46.
If the two-month price average of jet fuel per liter falls below P21, no fuel surcharge will be collected.
Resolution 46 notes that airline fuel surcharge is an optional fee airlines may collect to recover fuel costs and stem losses caused by a spike in fuel cost.
“Fuel surcharge is not a part of the basic airfare and may be reduced or removed depending on the price of jet fuel in the market, in accordance with prevailing international practice,” according to the resolution.
Airlines wishing to impose or collect fuel surcharge from March to April 2022 must file their application with CAB on or before the effectivity period, with fuel surcharge rates not exceeding the stated level. For fuel surcharge to be collected in the equivalent currency, the applicable conversion rate for the period is $1 is to P50.75.
