Aviation turbine fuel (ATF) prices for domestic airlines were raised by a calibrated 8.5 per cent on Wednesday, instead of more than doubling as warranted by a war-driven surge in global oil prices.
Rates for commercial LPG and premium petrol were also increased amid firm energy trends.
ATF or jet fuel for domestic carriers was hiked by ₹8,289.04 per kilolitre, or 8.56 per cent, to ₹1,04,927.18 per kl from ₹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 such as non-scheduled, ad hoc and charter, would pay. For them, the prices have gone up by ₹1,10,703.08 per kl, or 114.5 per cent, to ₹2,07,341.22 per kl.
By evening, the country’s largest airline, IndiGo, announced revised fuel charges ranging from ₹275 to ₹10,000, which will push airfares higher for many domestic and international flights amid the rise in jet fuel.
The rate of commercial LPG — the other petroleum product apart from ATF whose pricing is deregulated — has been increased by ₹195.50 per 19kg cylinder.
The price of select premium, or branded petrol and diesel, which make up for 2-5 per cent of all auto fuels sold in the country, too, was increased by ₹1.50 a litre to ₹92.99 for “Extra Green” diesel and by ₹11 to ₹160 a litre for 100 octane petrol (XP100).
The prices of normal, or unbranded petrol and diesel, remain unchanged, as so do the rates of domestic cookinggas LPG.
The petroleum ministry said that while international oil prices had jumped to over $100 per barrel in one month, “only a partial and staggered increase of 25 per cent (₹15 per litre or ₹15,000 per kl)” was being passed on to airlines. The civil aviation ministry endorsed the 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 per cent number was the increase on the “base price” of ATF.
At a media briefing, Sharma said a calibrated approach had been taken on revision of ATF prices so as to have a minimal impact. Asangba Chuba Ao, joint secretary in the ministry of civil aviation, said the move would ensure that carriers’ domestic operational costs remain manageable and would not lead to the levy 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 because of 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 said in a post on X that ATF prices in India were deregulated in 2001 and were 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 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 per cent (only ₹15 per litre) to the airlines. Foreign routes will pay for the full increase in ATFprices consistent with what they pay in other parts ofthe world.”
Rates of commercial LPG, which is used by hotels and restaurants, were hiked by ₹195.50 per 19kg cylinder. A 19kg commercial LPG now costs ₹2,078.50 in Delhi.