Jet Fuel Prices Rise by 8.7 Percent, LPG Prices Drop by 4 Rupees

Jet fuel constitutes over 40 percent of an airline’s operating cost and the price increase will flight ticket prices.

A Jet Airways Boeing 777-300ER. (Photo: Reuters)

Aviation Turbine Fuel (ATF), or jet fuel, price was hiked by 8.7 percent on Friday but that of non-subsidised cooking gas LPG was cut by Rs 4 per cylinder on global trends.

ATF price in Delhi was raised by Rs 3,371.55 per kilolitre, or 8.69 percent, to Rs 42,157.01 per kl, oil companies said on Friday.

The hike comes on the back of a marginal 1.3 percent or Rs 515.85 cut in rates on 10 March. Prior to that, the rates were hiked steeply by as much as 12 per cent, or Rs 4,174.49, on 1 March, almost neutralising a Rs 4,765.5 cut on 1 February.

The 1 March hike broke the cycle of three consecutive monthly price reductions. Rates vary at different airports because of differential local sales tax or value-added tax (VAT).

Jet fuel constitutes over 40 percent of an airline’s operating cost and the price increase will add to the financial burden on cash-strapped carriers.

No immediate comment was available from the airlines on the impact of the price increase on passenger fares.

Simultaneously, the oil firms cut prices of non-subsidised LPG, which consumers buy after exhausting their quota of 12, by Rs 4 per 14.2 kg bottle.

Non-subsidised cooking gas (LPG) now costs Rs 509.50 in Delhi as against Rs 513.50 previously. This is the third reduction in rates in a row. Prices were last cut by Rs 61.50 on 1 March. Rates were reduced by Rs 82.5 per 14.2-kg bottle on 1 February.

Subsidised LPG costs Rs 419.33 per 14.2-kg cylinder in Delhi.

The three fuel retailers – Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum, revise jet fuel and non-subsidised LPG prices on the first day of every month, based on the average international price in the preceding month.

The ATF price cut on 10 March was on account of change in taxation.