On April 1, the Union government said the oil marketing companies (OMCs) in consultation with the civil aviation ministry had introduced only a partial, phased hike of 25% (Rs 15/litre only) for airlines.
International routes will pay the full increase in ATF prices, also known as jet fuel prices, in line with those in other parts of the world, the government clarified.
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“ATF prices in India were deregulated in 2001 and are revised on a monthly basis based on an international benchmark formula. Due to the closure of the Strait of Hormuz and the emergency situation in global energy markets, the ATF price for the domestic markets was expected to increase by more than 100% on April 1,” said a post on X by the Ministry of Petroleum and Natural Gas.
Earlier, a PTI report said the price of aviation turbine fuel (ATF), or aviation fuel, has more than doubled to a record high. ₹2.07 lakh per kiloliter on Wednesday, but domestic airlines will not have to pay the steep increase as there is a mechanism to protect them.
“To insulate domestic travel costs from the substantial increase in international prices, the PSU Oil Marketing Companies of the Ministry of Petroleum, in consultation with the Ministry of Civil Aviation, have passed on only a partial and incremental increase of 25% (Rs.15/litre only) to the airlines. Foreign routes will pay the full increase in ATF prices in line with what is applicable in other parts of the world,” the ministry said.
At the same time, commercial LPG rates were increased ₹195.50 a barrel, reflecting a surge in global oil prices linked to the widening war in West Asia, the news agency said.
ATF price in Delhi has been increased ₹110,703.08 per kiloliter, or 114.5 percent, up ₹207,341.22 per kl, according to state fuel retailers.
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ATF, being a fully deregulated product, is priced at prevailing comparative international prices. This is in accordance with a written agreement with the airlines, news agencies said.
Hence, the new rates will apply to all international airlines refueling in India from Wednesday, industry sources told news agency PTI.
Domestic airlines shielded
However, domestic airlines will not have to pay high rates as a mechanism is in place to prevent the entire burden from being shifted to them, a PTI report said.
Union Civil Aviation Minister Ram Mohan Naidu Kinjarapu thanked the Prime Minister Narendra Modi and Union Petroleum Minister Hardeep Puri for their timely intervention.
“This calibrated approach will help protect passengers from price spikes, ease the burden on domestic airlines and support the continued stability of the aviation sector at this crucial time. It will also benefit the wider economy by ensuring the smooth movement of cargo and maintaining vital air links for trade and logistics,” Ram Mohan said in a post on X.
This is the first time ever that the price of ATF has exceeded ₹2 lakh per kl mark. The previous peak was in 2022, when rates were raised ₹1.1 million per kl after oil prices spiked after Russia invaded Ukraine.
This is the second monthly rate increase. As of March 1, prices rose by 5.7 percent ( ₹5,244.75 per cl).
In order to insulate domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies only passed a partial and gradual increase of 25%.
Rising prices will further burden airlines, which already burn more fuel flying longer routes to Western destinations due to airspace closures due to the war. Fuel accounts for about 40 percent of an airline’s operating costs.
