By Ashley Erika O. Jose, Reporter
THE CIVIL Aeronautics Board (CAB) raised the passenger fuel surcharge to Level 19 for April 16-30, the very best since 2022 and slightly below the utmost allowable rate, increasing fares for flights booked in the course of the period.
The speed follows the Level 8 surcharge imposed for April 1-15, based on an April 13 advisory released on Wednesday, with the rise greater than doubling earlier rates.
At this level, fuel surcharges range from P627 to P1,834 for domestic flights and from P2,070.77 to P15,397.15 for international flights, depending on distance.
Indicative rates show that passengers may pay a further P2,071 for flights between Manila and Taiwan, Hong Kong, Vietnam, Cambodia, and Brunei. Surcharges rise to about P3,221.34 for routes to Indonesia, Japan, South Korea, and India and might reach as much as P14,663.96 for flights to North America, the UK, and the Netherlands.
Fuel surcharges are variable fees added to base fares to offset changes in jet fuel costs and are adjusted based on movements in jet fuel prices using the Mean of Platts Singapore benchmark.
In response to the International Air Transport Association (IATA), jet fuel prices fell 6.7% week on week to $184.63 per barrel as of April 17 but surged 105.1% 12 months on 12 months.
The Level 19 fuel surcharge, slightly below the utmost Level 20, is the very best in 4 years, based on CAB data.
Starting in April, the CAB shifted from a monthly review of fuel surcharges to a 15-day monitoring cycle to reply more quickly to fuel price movements following the war within the Middle East.
“This interim measure shall be in effect until the present situation stabilizes, or as could also be revised or revoked accordingly,” CAB Executive Director Carmelo L. Arcilla said.
For airlines collecting surcharges in foreign currency, the equivalent rate is P59.95 to the dollar, the CAB said.
Local airlines earlier assured sufficient jet fuel supply following concerns about possible aircraft grounding attributable to supply constraints.
For low-cost carrier AirAsia Philippines, geopolitical uncertainty has pushed operating costs beyond initial forecasts, as jet fuel prices greater than doubled from last 12 months’s levels.
“While rising fuel costs proceed to affect airline business models built on inexpensive fares, we proceed to search out ways to maintain travel as accessible as possible without compromising the security and reliability of our flights,” the airline said in an announcement.
Data from the Department of Energy showed that the country’s jet fuel supply could last as long as 61 days as of April 17.
Transportation Acting Secretary Giovanni Z. Lopez said the fuel surcharge could reach Level 20, given the present trajectory of costs.
‘VERY CONCERNING’
“Level 19 is already next to the very best level, which is Level 20, and that’s already very concerning. Yet the tensions within the Middle East haven’t yet abated, so it’s very much possible we could reach that,” said Nigel Paul C. Villarete, a senior adviser on public-private partnership at Libra Konsult, Inc., and former chief executive officer of the Mactan-Cebu International Airport Authority.
“Within the meantime, it may additionally make people spend less on travel, although we do want them to spend more, especially foreign visitors, because tourism is a significant economic driver in our country,” he said.
“A high surcharge means high fear of possible supply constraints… So high surcharge is supposed to kill or discourage some demand for air travel. The leisure travel will likely be canceled temporarily, and only essential and business travels will proceed via high fare surcharge,” Bienvenido S. Oplas, Jr., president of Minimal Government Thinkers, said in a Viber message.
IATA warned that flight cancellations could emerge in some regions attributable to jet fuel shortages, citing the International Energy Agency (IEA).
“That is already happening in parts of Asia. Together with doing the whole lot possible to secure alternative supply lines, it’s vital that authorities have well-communicated and well-coordinated plans in place in case rationing becomes essential, including for slot relief,” IATA Director-General William M. Walsh said.
Jet fuel accounts for about 7% of worldwide oil demand, with markets becoming more vulnerable attributable to disruptions in Middle East supply, IEA said.
Earlier this month, the Civil Aviation Authority of the Philippines encouraged airlines to adopt sustainable aviation fuel (SAF) and is assessing the viability of local production.
The Institute for Climate and Sustainable Cities (ICSC) said adopting SAF from local and diversified feedstock could reduce reliance on imported fuels and help stabilize prices in the long run, shielding airlines from sharp fossil fuel price spikes.
“Within the Philippines, nonetheless, these advantages will only be realized if domestic SAF production is developed and native feedstock supply is strengthened,” ICSC Chief Data Scientist Jephraim C. Manansala said via e-mail.
IATA reported in December that SAF accounted for 0.6% of total jet fuel consumption last 12 months.
The group attributed limited supply to weak policy support and noted that SAF stays dearer than fossil-based jet fuel.
“SAF today stays significantly dearer than conventional jet fuel — typically around two to 5 times the associated fee. This premium makes voluntary uptake unlikely without support. Incentives may also help bridge this gap and encourage initial adoption,” Mr. Manansala said.
“Imported SAF doesn’t eliminate foreign dependence; it shifts it… For SAF to actually strengthen energy security, incentives should be tied to domestic production. Which means supporting local industries with feedstocks, agricultural residues, waste oils, biomass, and constructing enough production capability within the Philippines,” he added.