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The Civil Aeronautics Board approved an upward adjustment on the passenger fuel surcharge airlines may charge from September to October 2021
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The development follows an increase in jet fuel prices
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The surcharge ranges 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)
The Civil Aeronautics Board (CAB) has approved an upward adjustment on the passenger fuel surcharge airlines may charge from September to October 2021 following an increase in jet fuel prices.
In an advisory dated August 16, 2021, CAB executive director Carmelo Arcilla said that from June to July 2021, the price of jet fuel averaged US$78.75 per barrel, equivalent to P24.29 per liter at an exchange rate of P49.03 per dollar. This latest rate falls within Level 2 of the passenger fuel surcharge matrix for domestic and international flights. The matrix is covered by CAB Resolution No. 44, released 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).
CAB in July 2021 announced the reimposition of fuel surcharge following increases in jet fuel price. The fuel surcharge was officially suspended in August 2020, but has not been imposed since May 2020 due to lower jet fuel price.
READ: Higher air fares seen with ok of fuel surcharge
Resolution No. 44, which reimposes the collection of fuel surcharge on passengers on domestic and international flights, states that the applicable fuel surcharge should be determined based on 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 will be fixed for two months.
The two-month price average will be the ceiling rate for the fuel surcharge.
The applicable fuel surcharge will be evaluated every two months and announced 15days prior to its effectivity, in accordance with the timetable in Resolution No. 44.
If the two-month price average of jet fuel per liter falls below P21, no fuel surcharge will be collected.
Resolution 44 notes that airline fuel surcharge is an optional fee that airlines may impose and 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 pending on the price of jet fuel in the market, in accordance with prevailing international practice,” the resolution adds.
Airlines wishing to impose or collect fuel surcharge from September to October 2021 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 P49.03.
The imposition of fuel surcharge stopped in 2015 as fuel prices during that time had dropped, and the surcharge was reimposed in 2018 upon the request of airlines following increases in the prices of fuel.
