In New Delhi, on April 1, aviation turbine fuel (ATF) prices for domestic airlines were raised by 8.5 percent, instead of the expected doubling due to a surge in global oil prices driven by the war, even as prices for commercial LPG and premium petrol also increased.
ATF, or jet fuel, for domestic carriers, increased by Rs 8,289.04 per kilolitre, or 8.56 percent, to Rs 1,04,927.18 per kl from Rs 96,638.14 per kl last month, according to state-owned oil firms.
Domestic airlines will pay half of what foreign airlines, as well as other carriers like non-scheduled and charter airlines, would pay. For them, the prices have increased by Rs 1,10,703.08 per kl, or 114.5 percent, to Rs 2,07,341.22 per kl.
In addition, the prices of commercial LPG, the other petroleum product apart from ATF, whose pricing is deregulated, were also increased by Rs 195.50 per 19-kg cylinder.
The price of select premium petrol and diesel, which make up 2-5 percent of all auto fuels sold in the country, was also increased by Rs 1.50 a litre to Rs 92.99 for 'Extra Green' diesel and by Rs 11 to Rs 160 a litre for 100 octane petrol (XP100).
The prices of normal petrol and diesel remain unchanged, and so do the rates of domestic cooking gas LPG.
The Petroleum Ministry stated that while international oil prices have jumped to over USD 100 per barrel in one month, "only a partial and staggered increase of 25 percent (only Rs 15 per litre or Rs 15,000 per kl)" is being passed on to airlines. The Civil Aviation Ministry also endorsed this number.
The difference between the two was explained by Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, as one was the final rate inclusive of all levies and taxes, while the 25 percent number was the increase on the "base price" of ATF.
At a media briefing, Sharma said a calibrated approach has been taken on revising ATF prices so as to have minimal impact, while Asangba Chuba Ao, Joint Secretary in the Ministry of Civil Aviation, said the move would ensure that carriers' domestic operational costs remain manageable and will not lead to the imposition of additional fuel surcharge on airline tickets.
With the partial hike in ATF price, airlines would recalibrate their pricing and the move prevents a potential industry-wide crisis, he added.
The jet fuel price rise is likely to further strain airlines, which are already burning more fuel in taking longer routes for flying to Western destinations due to the war. Fuel makes up around 40 per cent of an airline's operating cost.
Explaining the rationale for the jet fuel price hike, 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 extraordinary situation in global energy markets, the price of ATF for domestic markets was expected to increase by more than 100 percent on April 1," it said.
"In order to insulate the 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 percent (only Rs 15 per 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."
Civil Aviation Minister Ram Mohan Naidu Kinjarapu termed the partial and staggered increase in ATF price for domestic airlines as "pragmatic and forward-looking, while ensuring that foreign routes bear the full market-aligned price".
"This calibrated approach will help shield passengers from sharp fare increases, ease the burden on domestic airlines, and support the continued stability of the aviation sector at this crucial juncture. It will also benefit the broader economy by ensuring the smooth movement of cargo and maintaining vital air connectivity for trade and logistics," he added.
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 hiked by Rs 1.1 lakh per kl after oil prices surged after Russia invaded Ukraine.
Wednesday's hike is the second straight monthly increase in rates. Prices on March 1 were hiked by 5.7 percent (Rs 5,244.75 per kl).
In addition, rates of commercial LPG - one that is used by hotels and restaurants - were hiked by Rs 195.50 per 19-kg cylinder. A 19-kg commercial LPG now costs Rs 2,078.50 in Delhi.
Rates were 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.
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.
On LPG prices, the ministry said prices of commercial LPG cylinders, used by industries and hotels, are deregulated, market-determined and revised normally on a monthly basis. Their consumption is less than 10 per cent of the total LPG consumed in the country.
"April 1 price increase in commercial cylinder price is due to a 44 percent surge in the Saudi Contract Price: from USD 542 per tonne in March to USD 780 per tonne for April, as 20-30 per cent of global LPG supplies are stuck in the Strait of Hormuz (due to the war in West Asia)," it said.
The oil marketing companies are incurring an under-recovery of Rs 380 per cylinder in keeping domestic LPG rates unchanged, it added.
"Cumulative losses by end-May will reach approximately Rs 40,484 crore. Last year also, out of total losses of Rs 60,000 crore, Rs 30,000 crore were absorbed by Oil PSUs and Rs 30,000 crore by the Government of India, in order to insulate the Indian citizens from high international LPG prices."
India's domestic LPG price remains one of the lowest in the world compared to Pakistan: Rs 1,046. Sri Lanka: Rs 1,242. Nepal: Rs 1,208, it noted.
On the increase in price of premium petrol and diesel, it said, "Regular petrol and diesel prices - the fuel that India runs on - are unchanged, i.e. at Rs 94.77 per litre and Rs 87.67 per litre in Delhi".
"With global petroleum prices up by up to 100 percent in the last 1 month, PSU OMCs are incurring under-recoveries of Rs 24.40 per litre on petrol and Rs 104.99 a litre on diesel at RSP level as on 01.04.2026," it said.
"The recent Rs 2/litre revision applies only to premium petrol variants - XP95, Power95, Speed - high-octane performance products, whose prices are revised on a fortnightly basis and whose sales by volume are 2 per cent and 5 per cent of total volume. They are purchased by motorists, at a premium, by choice."
Every pump in India continues to offer regular petrol and diesel at unchanged prices, even as rates in countries all over the world have risen by 30-50 per cent, it added.