Price of aviation turbine fuel (ATF), or jet fuel, was more than doubled to a record Rs 2.07 lakh per kilolitre on Wednesday but domestic airlines will not have to pay the steep increase as a mechanism is in works to shield them.Alongside, commercial LPG rates were raised by Rs 195.50 per cylinder, mirroring the the surge in global oil prices linked to the widening West Asia conflict.ATF price in Delhi was hiked by Rs 110,703.08 per kilolitre, or 114.5 per cent, to Rs 207,341.22 per kl, according to state-owned fuel retailers.ATF being a completely deregulated product is priced at prevailing benchmark international prices. This is as per a written understanding with the airlines.
So the new rates will apply for any international airline refuelling in India from Wednesday, industry sources said.Domestic airlines will however not have to pay the steep rates as a mechanism is in works to not pass on the entire burden on to them, they said.It wasn’t immediately known how much will domestic airlines have to pay and how much will be absorbed in some other form.No formal announcement of the mechanism has been made so far.
This is the first time ever that the ATF price has crossed Rs 2 lakh per kl mark. The previous peak was in 2022 when rates were hiked to Rs 1.1 lakh per kl after oil prices surged after Russia invaded Ukraine.This is the second monthly increase in rates. Prices on March 1 were hiked by 5.7 per cent (Rs 5,244.75 per kl).
The rising prices will further strain airlines which are already burning more fuel in taking longer routes for flying to western destinations because of closure of airspace due to the war. Fuel makes up for around 40 per cent of an airline’s operating cost.