New Delhi, April 1 The price of Aviation Turbine Fuel (ATF), or jet fuel, more than doubled to a record Rs 2.07 lakh per kilolitre on Wednesday, mirroring the surge in global oil prices last month, but for domestic airlines, the increase would only be 8.5 per cent.
Domestic airlines will pay half of what other carriers, such as those operating on non-scheduled, ad-hoc, and charter flights, would pay. For them, the prices have increased by Rs 110,703.08 per kl, or 114.5 per cent, to Rs 207,341.22 per kl.
Jet fuel prices were deregulated more than two decades ago, and since then, the rates have been aligned with benchmark international prices, according to an agreement with the airlines.
However, since the surge in global energy prices caused by the Middle East war warranted the steepest increase ever in ATF prices, the government and state-owned oil companies decided to adopt a calibrated approach, industry sources said.
While foreign airlines and other carriers would pay market rates, prices for domestic airlines have been moderated, they said.
In addition, the price of commercial LPG was raised by Rs 195.50 per cylinder, mirroring the surge in global oil prices linked to the escalating conflict in West Asia.
This is the first time ever that the ATF price has crossed the Rs 2 lakh per kl mark. The previous peak was in 2022, when rates increased by Rs 1.1 lakh per kl after oil prices surged following Russia's invasion of Ukraine.
This is the second monthly increase in rates. Prices on March 1 were hiked by 5.7 per cent (Rs 5244.75 per kl).
The rising prices will further strain airlines, which are already burning more fuel to take longer routes to western destinations due to the closure of airspace caused by the war. Fuel accounts for around 40 per cent of an airline's operating cost.
In addition, the price of commercial LPG, which is used by hotels and restaurants, was raised by Rs 195.50 per 19-kg cylinder.
A 19-kg cylinder of commercial LPG now costs Rs 2,078.50 in Delhi.
The price of commercial LPG was last increased by Rs 114.5 per 19-kg cylinder on March 1.
Domestic cooking gas LPG rates, which were last hiked by Rs 60 per 14.2-kg cylinder on March 7, remain unchanged. It costs Rs 913 per 14.2-kg cylinder in Delhi.
State-owned Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum revise ATF and LPG prices on the first day of every month based on international benchmarks and the exchange rate.
Global oil prices have increased by almost 50 per cent after the war in West Asia disrupted energy supply chains.
Petrol and diesel prices continue to remain frozen after a Rs 2 per-litre reduction in March last year; petrol currently costs Rs 94.72 per litre in Delhi and diesel Rs 87.62.
Explaining the increase, the Ministry of Petroleum and Natural Gas in a post on X said, "ATF prices in India were deregulated in 2001 and are revised on a monthly basis based on a formula of international benchmarks."
Due to the closure of the Strait of Hormuz and the extraordinary situation in global energy markets, the price of ATF for domestic markets was expected to increase by more than 100 per cent on April 1, it said.
"In order to insulate domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies of the Ministry of Petroleum, in consultation with the Ministry of Civil Aviation, have passed only a partial and staggered increase of 25 per cent (only Rs 15/litre) to the airlines. Foreign routes will pay for the full increase in ATF prices, consistent with what they pay in other parts of the world."