As a result of a dip in the price of jet fuel, the Civil Aeronautics Board (CAB) has reduced passenger fuel surcharge rates that airlines operating in the Philippines may collect in January and February 2019.
The fuel surcharge for January and February 2019 is lower than that of November and December 2018, which reached Level 4. Rates at Level 3 range from P74 to P291 per passenger (one way) on a domestic flight, and from P381 to P3,632 per passenger (one way) on an international flight. This compares with Level 4 rates ranging from P108 to P411 per passenger (one way) on a domestic flight, and P543 to P5,189 per passenger (one way) on an international flight.
In an advisory dated December 14, CAB executive director Carmelo Arcilla noted that from October to November 2018, the average price of jet fuel was US$88.20 per barrel, equivalent to P29.63 per liter at an exchange rate of P53.41 per $1. This, CAB said, corresponds to Level 3 on the Passenger Fuel Surcharge Matrix (PFSM) for domestic and international flights that CAB released last September 10 under CAB Resolution No. 44.
Resolution No. 44, which reimposes the collection of fuel surcharge for passengers on domestic and international flights, states that the applicable fuel surcharge shall 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. This shall be the ceiling rate for the fuel surcharge.
The applicable fuel surcharge will be evaluated every two months and announced 15 days prior to its effectivity, in accordance with the timetable under Resolution No. 44.
Under the timetable, the announcement for the January-February 28 period falls on December 15, with evaluation period from October to November 2018.
If the two-month price average of jet fuel per liter falls below P21, no fuel surcharge will be collected.
Airlines wishing to impose or collect fuel surcharge for January and February 2019 must file their application with CAB on or before the beginning of their effectivity period, with fuel surcharge rates not exceeding the stated level. For fuel surcharge to be collected in equivalent currency, the applicable conversion rate for the period is $1 to P53.41.
CAB said the application form for the authority to impose fuel surcharge can be downloaded from its website.
CAB approved the reimposition of fuel surcharges by airlines operating in the Philippines following the increases in the prices of fuel.
Resolution 44 notes that airline fuel surcharge is an optional fee, imposed and collected by airlines to recover fuel costs and stem losses caused by an upward 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,” the resolution adds.
