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Stock image of an airplane
Image by Johannes Kirchherr from Pixabay
MANILA, Philippines — Travelers may pay lower airfares in July after the Civil Aeronautics Board (CAB) reduced the fuel surcharge collected by airlines to its lowest level since oil prices surged amid tensions in the Middle East.
In an advisory dated June 26, the CAB said it lowered the surcharge to Level 9 for July 1 to 15, down from Level 12 in the second half of June.
The latest reduction was the second consecutive cut in the surcharge level after the CAB lowered it from Level 13 to Level 12 for the second half of June.
Under Level 9, passengers may pay an additional P287 to P839 for domestic flights, lower than the previous range of P389 to P1,137 under Level 12.
For international flights, the allowable surcharge was reduced to P947.30 to P7,044.27, from P1,284.40 to P9,550.13.
Passengers flying short-haul international routes to destinations such as Hong Kong, Taiwan and Vietnam will pay a minimum additional fee of P947.30, while long-haul flights to destinations including North America, the United Kingdom and the Netherlands will have higher surcharges.
The latest adjustment is the lowest surcharge level approved by the CAB since the United States and Israel launched attacks on Iran in late February, which triggered a sharp increase in global oil prices.
At the height of the price surge, the surcharge reached Level 19 in the second half of April. Passengers then paid as much as P1,834 for domestic routes and up to P15,397.15 for international flights.
Before fuel prices spiked, the CAB had imposed Level 4, which allowed fuel surcharges of P117 to P342 for domestic flights and P385.70 to P2,867.82 for international routes.
The International Air Transport Association said the average global jet fuel price dropped to $119.17 per barrel as of June 19, from $138.86 a week earlier. Fuel prices in the Asia and Oceania region, which includes the Philippines, were lower at $115.72 per barrel.
The fuel surcharge is reviewed by the CAB every 15 days based on prevailing jet fuel prices. Before the policy change, adjustments were made on a monthly basis.
For the first half of July, the regulator set the exchange rate at P60.99 per US dollar for airlines collecting surcharges in foreign currencies.
The latest reduction came as global jet fuel prices eased following signs of improving conditions in the Middle East.
The United States and Iran reached a preliminary agreement on June 17 that included efforts to restore shipping through the Strait of Hormuz, a key waterway that carries a significant portion of the world's oil supply.
