Citing the contuining increase in the cost of jet fuel, the Civil Aeronautics Board gave the nation's airlines permission yesterday to raise domestic air fares by up to 3.7 percent effective Nov. 1.

The increase in the domestic fare ceiling approved yesterday is the fourth this year, bringing the level 25.9 percent higher than it was at the start of 1979.

The CAB recently began readjusting the fare level every two months instead of every six in order to help the airlines cope with unpredictable fuel costs.

Yesterday the board said the cost of fuel rose 3.75 cents a gallon from August to September to a new average level of 67.14 cents compared with 52.49 cents in June.

The board used projected costs through December to arrive at the 3.7 percent increase it allowed in the domestic fare level.

Although the board said it would continue to allow arlines to adjust their fares to the new level on short notice, it warned that it might have to reconsider its liberal policy if the airlines fail to give the public adequate notice of fare changes this time.

The board said that when it allowed the airlines to raise fares in September it was deluged by "an intolerable number of companies" from consumers and travel agents about "alleged chaotic conditions" in the industry as some airlines rushed to implement increased fares with little or no effort to coordinate their efforts with their agents.

The airlines have been hit hard by increases in fuel prices this year, and their fuel costs have figured prominently along with a softening economy in the explanations they have been issuing with their generally unhappy third-quarter results.

Braniff International, for instance, had an 84 percent increase in the price of jet fuel since last December -- from 40.22 cents a gallon to 73.96 cents in September. Although the cost of jet fuel constituted 23.5 percent of its total operating expense in the third quarter of last year, it was 32.3 percent in the third quarter of this year.