Passenger fuel surcharge rates that airlines operating in the Philippines may collect in March and April 2019 are down to Level 2 from the current Level 3 as the price of jet fuel continues to dip.
In an advisory dated February 15, Civil Aeronautics Board (CAB) executive director Carmelo Arcilla said that from December 2018 to January 2019, the price of jet fuel averaged US$73.50 per barrel, equivalent to P24.32 per liter at an exchange rate of P52.60 per $1. This corresponds to Level 2 on the passenger fuel surcharge matrix (PFSM) for domestic and international flights that CAB released last September 10 under CAB Resolution No. 44.
The fuel surcharge for March and April is lower than Level 3 for January and February, and Level 4 for November and December 2018. Level 2 rates range from P45 to P171 per passenger (one way) on a domestic flight and from P218 to P2076 per passenger (one way) on an international flight.
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 shall 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 March-April fuel surcharge falls on February 15, with evaluation period from December 2018 to January 2019.
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 effectivity period begins, 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 is 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 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 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,” the resolution adds.
