-
The Philippine Ports Authority issued clarificatory guidelines on the implementation of the fuel-based adjustment mechanism for harbor pilotage services
-
The supplemental operational guidelines under PPA Operations Memorandum Circular No. 004-20206 was issued following various requests for clarification from PPA Port Management Offices and harbor pilot associations on the computation of the FBA
-
The computation of the FBA should use the DOE NCR Diesel Price adopted under the Weekly Fuel Price Advisory
-
PPA also noted that the FBA mechanism is an administrative tariff adjustment mechanism
-
The nautical mile distance used in computing the FBA should be based on the officially recognized pilot boarding station or such other operational point expressly recognized by the PPA for the concerned pilotage district
The Philippine Ports Authority (PPA) issued clarificatory guidelines on the implementation of the fuel-based adjustment (FBA) mechanism for harbor pilotage services as a temporary cost recovery measure to address fuel price volatility.
The supplemental operational guidelines under PPA Operations Memorandum Circular (OMC) No. 004-2026 was issued following various requests for clarification from PPA Port Management Offices and harbor pilot associations on the computation of the FBA implemented under PPA Administrative Order (AO) No. 006-2026.
READ: PPA sets up fuel adjustment scheme for pilotage services
In particular, clarification was requested on the determination of the applicable current fuel price (CFP), the reckoning point for computing nautical mile distances, and the documentary requirements supporting fuel consumption.
The FBA mechanism was established under PPA AO No. 006-2026 in May and applies to all harbor pilotage service providers operating within all PPA-administered ports and pilotage districts.
AO No. 006-2026 noted that “pilot boat operations are an integral component of harbor pilotage services and are significantly affected by fluctuations in fuel prices.”
The AO is pursuant to the directive under Department of Transportation (DOTr) Department Order No. 2026-007, and aims to “ensure transparent, uniform, and regulated recovery of fuel-related operational cost fluctuations.” PPA is an attached agency of DOTr.
Under AO No. 006-2026, the FBA refers to the allowable fuel cost-recovery per pilotage movement (e.g. docking, undocking) computed in accordance with the guidelines under the AO. The FBA should not form part of the base pilotage rate and should be reflected as a separate billing line item.
OMC No. 004-2026 said the supplemental guidelines are issued to promote uniform application of the FBA mechanism nationwide and avoid varying interpretations that may result in inconsistent implementation among pilotage districts.
Under AO No. 006-2026, PPA will issue a Weekly Required Adjustment Rate (RAR) every Monday that will serve as the maximum allowable FBA for the applicable week (Monday to Sunday).
The RAR will be based on the Department of Energy’s (DOE) CFP (weekly average marine diesel price as published by DOE), computed fuel price differential (difference between the current fuel price and the baseline fuel price), applicable nautical mile operations, and approved fuel consumption rates under AO No. 006-2026.
According to OMC No. 004-2026, the CFP to be used in the computation of the FBA should be exclusively the Weekly DOE National Capital Region (NCR) Diesel Price adopted by the PPA through the Weekly Fuel Price Advisory issued by the PPA Commercial Services Department (CSD).
It added that the actual fuel purchased or consumed by a harbor pilot service provider will not be used as the basis for determining the applicable CFP.
For purposes of maintaining a uniform nationwide pricing mechanism, the computation of the FBA should use the DOE NCR Diesel Price adopted under the Weekly Fuel Price Advisory regardless of the actual fuel utilized by the pilot boat or service vessel.
PPA also noted that the FBA mechanism is an administrative tariff adjustment mechanism and should not be construed as a reimbursement of the actual fuel expense incurred by the harbor pilot service provider.
The nautical mile distance used in computing the FBA, meanwhile, should be based on the officially recognized pilot boarding station (PBS) or such other operational point expressly recognized by the PPA for the concerned pilotage district under existing regulations.
The temporary deployment, repositioning, or stationing of pilot boats nearer particular port, terminal, or anchorage should not, by itself, modify the prescribed reckoning point for purposes of FBA computation.
The computation should also be based on the prescribed round-trip nautical mile distance from the officially recognized PBS to the boarding point of the vessel.
The Weekly Fuel Price Advisory will be issued by the CSD every Monday based on the latest officially published DOE fuel price reference.
If the Monday issuance falls on a non-working holiday, the Weekly Fuel Price Advisory should be issued on the next succeeding working day. If DOE has not yet published the succeeding weekly fuel price reference by the prescribed CSD cut-off time, the latest officially published DOE fuel price reference will be temporarily carried forward as the basis.
AO No. 006-2026 emphasized that the FBA will be treated strictly as a cost-recovery mechanism and should not be subject to any government share, reduction, or similar charge. Government share will apply only to base pilotage rates, it pointed out.
Where the current fuel price is equal to or lower than the baseline fuel price of P49 per liter, no FBA should be imposed.
A corresponding downward adjustment should automatically apply whenever the fuel price differential decreases.
READ: PPA issues revised policy on pilots, pilotage services
Prior to the implementation of any upward adjustment, harbor pilots should comply with notice requirements, including the posting of notice in conspicuous places within ports and pilotage stations; and publication or posting in the official website or official platform of the PPA.
No upward adjustment should take effect earlier than three calendar days from issuance of the corresponding notice by the PPA.
AO No. 006-2026 prohibits overcharging beyond the allowable FBA, unauthorized adjustments, failure to implement corresponding downward adjustments, misrepresentation or falsification of submitted data, and failure to maintain the required records.—Roumina Pablo
