SINGAPORE (Reuters) – Singapore Airlines Ltd.'s (SQ) budget arm Scoot said on Thursday it would raise fares across its network by an average of about 5 percent in response to a surge in oil prices that had pushed up costs. The fare hike, effective Sept. 1, will add $5 to S$30 ($3.66 to $21.98) to the cost of each one-way journey depending on the flight duration, the airline said in a statement. Carriers around the world are attempting to raise fares to help recoup the rising cost of fuel, with the oil price up 40 percent to $73 a barrel over the last year. The International Air Transport Association (IATA) in June forecast average passenger yields, a proxy for air fares, would rise by 3.2 percent this year, in the first annual gain since 2011 but lowered its annual profit estimate due to the rising cost of fuel and labor. Air New Zealand Ltd. in May announced a 5 percent increase in domestic fares due to rising costs, while regulators in Japan and Taiwan have allowed airlines to put in place fuel surcharges to help compensate for the higher oil price. Singapore Airlines last week reported a 3.2 percent decline in passenger yields for the quarter ended June 30, including a 1.8 percent fall at Scoot, disappointing investors who had hoped for fare increases.