A group of US cargo carriers has called on the Trump administration to temporarily suspend taxes on jet fuel in response to rising prices caused by the Middle East conflict.
In a position statement, National Air Carrier Association (NACA) president and chief executive George Novak warned that the cost of everyday goods and medical products would increase as a result of the rising cost of fuel.
The NACA would therefore like the Trump administration to consider a temporary waiver of federal excise taxes on commercial aviation fuel until market conditions stabilise and fuel prices begin to decline.
“Ultimately, increased fuel costs ripple through the broader economy, increasing prices on everything transported by air,” Novak said.
“From medical supplies and electronic components to flowers, perishables and consumer goods, everything becomes more expensive for American businesses and consumers.”
He added: “This action would provide immediate operational relief to carriers, help preserve critical air transportation capacity, support supply chain stability, and help limit additional inflationary pressure on the American economy during a period of significant geopolitical uncertainty.”
Jet fuel prices have risen sharply since the start of the US-Iran conflict at the end of February as a result of the closure of the Strait of Hormuz, which sees around 20% of the world’s oil transit through.
According to IATA/Platts data, average global jet fuel prices currently stand at $163 per barrel, an increase of 80.5% compared with the prior year’s average.
North American jet fuel prices are a little higher at $164 per barrel, which is 78.9% up on last year’s average.
However, there has been an improvement in recent weeks. Current average global prices are around 14% lower than last month’s average, the IATA statistics show.
And at one point in mid-April, prices were above $200 per barrel.
“Rising tensions in the Strait of Hormuz have driven sharp increases in aviation fuel prices and created growing concerns regarding the availability of jet fuel throughout portions of the global supply chain,” Novak said.
“Increased fuel costs are an industry-wide issue affecting passenger and cargo carriers, charter operators, supplemental air carriers, regional airlines and commercial operators of every size and type across the US.”
Members of the NACA include: ABX Air, ATI, Amerijet, Atlas Air, Eastern, Everts Air Cargo, Global Crossing Airlines, Gridiron Air, Kalitta Air, Lynden Air Cargo, National Airlines, Northern Air Cargo, Omni Air International, USA Jet Airlines and Western Global Airlines.
The Trump administration is currently considering whether to implement a 90-day suspension on the non-aviation fuel tax.
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