AirAsia said the move also applies to flights under its long-haul arm AirAsia X.
Oil prices are now below $50 per barrel after 6 months of declines, pushing down jet fuel prices.
Chief Executive Tony Fernandes said the move will help reduce travel costs, stimulate demand and boost tourism in the region.
Airlines impose the surcharges to pass on higher fuel costs to travellers when fuel prices are rising.
Rivals Virgin Australia and Cebu Pacific in the Philippines abolished fuel surcharges earlier this month.
AirAsia has dominated cheap travel in Southeast Asia for years but faces rising competition from the proliferation of discounts airlines in Asia.