Price of Aviation Turbine Fuel (ATF) more than doubled to a record Rs 2.07 lakh per kilolitre on Wednesday, reflecting a surge in global oil prices, but the increase for domestic airlines was limited to 8.5 per cent. Domestic carriers will pay half of what other operators—such as non-scheduled, adhoc and charter services—will pay. For those other carriers, ATF rose by Rs 110,703.08 per kl, or 114.5 per cent, to Rs 207,341.22 per kl.
ATF was deregulated over two decades ago and is aligned with international benchmark prices under a written understanding with airlines. Given the sharp rise in global energy prices after the Middle East war, the government and state-owned oil companies opted for a calibrated approach, moderating prices for domestic airlines while foreign carriers and other operators face market rates.
Commercial LPG used by hotels and restaurants was also raised by Rs 195.50 per 19-kg cylinder, with a 19-kg commercial cylinder now costing Rs 2,078.50 in Delhi. Rates were last increased by Rs 114.50 per 19-kg cylinder on March 1. Domestic cooking gas (14.2-kg) remains unchanged after a Rs 60 hike on March 7 and costs Rs 913 per cylinder in Delhi.
This is the first time ATF has crossed the Rs 2 lakh per kl mark; the previous peak was about Rs 1.1 lakh per kl in 2022 after oil prices spiked following Russia’s invasion of Ukraine. It is the second monthly increase in rates, following a 5.7 per cent (Rs 5,244.75 per kl) rise on March 1.
Airlines are likely to face added strain as they burn more fuel flying longer routes to western destinations due to airspace closures from the war; fuel accounts for around 40 per cent of an airline’s operating costs.
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 risen by almost 50 per cent after the West Asia conflict disrupted energy supply chains.
Petrol and diesel prices remain frozen after a Rs 2 per-litre reduction in March last year; petrol costs Rs 94.72 per litre in Delhi and diesel Rs 87.62.
The Ministry of Petroleum and Natural Gas said on X that ATF prices in India are revised monthly based on international benchmarks. Because of the closure of the Strait of Hormuz and the extraordinary situation in global energy markets, ATF for domestic markets was expected to rise by more than 100 per cent on April 1. To shield domestic travel costs, PSU oil marketing companies, in consultation with the Ministry of Civil Aviation, implemented only a partial and staggered increase of 25 per cent (only Rs 15 per litre) for the airlines, while foreign routes will pay the full ATF increase consistent with global rates.
