-
The Philippine Ports Authority clarified that private ports are not covered by the fuel surcharge adjustment measure that it allows port operators to impose as a temporary cost-recovery measure due to the increase in fuel prices
-
The FSA mechanism applies only to cargo handling operators, terminal operators, and other service providers operating within PPA ports whose applicable cargo handling and/or terminal service rates are subject to PPA approval, regulation, or authority
-
The FSA mechanism should not be construed as regulating, prescribing, or standardizing fuel surcharges that may be independently imposed by shipping lines
-
It should also not be interpreted as authority for PPA to regulate or prescribe the freight rates, shipping charges, or privately negotiated commercial charges of shipping lines
The Philippine Ports Authority (PPA) clarified that private ports are not covered by the fuel surcharge adjustment (FSA) measure that it allows port operators to impose as a temporary cost-recovery measure due to the increase in fuel prices.
The FSA mechanism applies only to cargo handling operators, terminal operators, and other service providers operating within PPA ports whose applicable cargo handling and/or terminal service rates are subject to PPA approval, regulation, or authority pursuant to existing laws, rules, and regulations.
Private ports and port facilities operating outside PPA ports are not covered, “considering that their landside rates and commercial arrangements are not regulated or approved by the PPA,” PPA clarified through Operations Memorandum Circular (OMC) No. 003-2026.
“The mere existence of a permit, accreditation, or regulatory relationship with PPA shall not be construed as authority to implement the FSA Mechanism on privately imposed landside rates or charges. The implementation of the FSA Mechanism shall therefore be limited to PPA-regulated tariffs and charges within ports under the jurisdiction of the PPA,” it added.
Moreover, OMC No. 003-2026 said the FSA mechanism should not be construed as regulating, prescribing, or standardizing fuel surcharges that may be independently imposed by shipping lines as part of their freight rates, transportation charges, or other commercial arrangements with their customers. It should also not be interpreted as authority for PPA to regulate or prescribe the freight rates, shipping charges, or privately negotiated commercial charges of shipping lines.
READ: PPA issues guidelines on fuel surcharge adjustment for port operators
The clarification is in response to requests from PPA Port Management Offices (PMOs), covered operators, and other stakeholders concerning the scope and application of the mechanism, as well as the documentary and operational requirements necessary to ensure consistent implementation. There were also requests for clarification concerning fuel surcharge amounts independently imposed by shipping lines, particularly whether such charges are subject to the FSA mechanism and whether shipping lines are required to follow the FSA rates or computation prescribed by the ports authority.
PPA last May issued Administrative Order (AO) No. 005-2026, which provides guidelines on the computation of FSA that port operators may impose as a temporary cost-recovery measure due to the increase in fuel prices. It aims to operationalize the FSA mechanism authorized under Department of Transportation (DOTr) Department Order No. 2026-009, and to ensure a uniform, transparent, and auditable system for the recovery of incremental fuel costs by port operators. PPA is an attached agency of DOTr.
FSA refers to a temporary surcharge expressed as a percentage of the PPA-approved tariff rate. It is applied to recover incremental fuel cost changes, based on the Department of Energy (DOE)-published fuel prices relative to the baseline fuel price.
AO No. 005-2026 noted that the FSA is a cost-recovery mechanism strictly limited to incremental fuel cost increases and should not be treated as a profit-generating charge.
The FSA should also not be implemented without prior approval of PPA and should be separately identified in all billing statements.
Moreover, it should not form part of the base tariff or be used in computing any government share, concession fee, or similar charges.
Aside from clarifying the coverage, OMC No. 003-2026 also noted that the applicable FSA rate will continue to be determined strictly in accordance with the formula, parameters, and procedures prescribed under AO No. 005-2026 and the applicable Weekly Fuel Price Advisory issued by the PPA Commercial Services Department (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.—Roumina Pablo
