This is according to Bonifacio Sam, Chairman of the Air Carriers Association of the Philippines (ACAP), which represents the local airline industry, including PAL Express, Cebgo, Cebu Pacific Air, Philippine Airlines, and Philippines AirAsia
On March 7, Sam told a special meeting of the Philippine House of Representatives’ Fuel Crisis Ad Hoc Committee that mean of Platts Singapore (MOPS) oil prices had risen from USD79 per barrel in December 2021 to USD124 per barrel by March 4, 2022. (MOPS is the average of a collection of Singapore-based oil product price evaluations issued by S&P Worldwide’s Platts, a global energy, petrochemicals, metals, and agriculture information supplier.)
In 2018, the Philippines Civil Aeronautics Board (CAB) created a methodology in cooperation with the local aviation industry to determine the fuel surcharges that airlines may put on passenger rates to mitigate the impact of rising fuel prices. According to the STAR Group of Publications, the formula was changed twice in 2019 and 2021.
While the association welcomed the mechanism, its implementation was left to the discretion of individual airlines. He said the aviation industry would continue to monitor the situation and “exercise fiscal discipline and tap effective revenue-generating measures amid this current situation, including implementing cost mitigating strategies”.
According to CAB, passenger fuel surcharges for domestic flights surged between PHP108 and PHP411 peso (USD2.06 and USD7.86) in March 2022 as a result of spiraling jet fuel prices, compared to PHP45 and PHP171 (USD0.86 to USD3.27) in March 2020 and March 2019.
International passenger fuel surcharges rose to between PHP543 and PHO5,026 (USD10.38 and USD96.12) in March 2022, up from PHP218 and PHO2,076 (USD4.16 and USD39.70) in March 2020 and March 2019.
Meanwhile, according to the Philippine News Agency, Speaker Lord Allan Velasco praised the government’s decision to grant fuel subsidies to industries adversely affected by increased oil prices.
“I believe that what the government is doing, giving subsidies to targeted beneficiaries who are severely affected by unabated oil price hikes, is the best solution for now,” Velasco said.
The government had declared that it was planning to disburse PHP2.5 billion (USD47.8 million) for a subsidy program that would provide fuel vouchers to qualifying public transportation workers.
In the meantime, the Fuel Crisis Ad Hoc Committee would ask President Rodrigo Duterte to call a special Parliamentary session to discuss a special Bill addressing taxes on fuel.
