Jet Fuel Prices Hiked: Foreign Routes To Pay Full Increased Rates, Says Govt Domestic Airlines Shielded

(MENAFN- Live Mint) The Union government said on 1 April that Oil Marketing Companies (OMCs), in consultation with the Ministry of Civil Aviation, have implemented only a partial, staggered increase of 25% (only Rs. 15/litre) for airlines.

Foreign routes will pay the full increase in ATF prices, also known as jet fuel prices, consistent with what they pay 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 amonthly basis based on a formula of international benchmarks. Due to the closure of Strait of Hormuz and theextraordinary situation in global energy markets, price of ATF for domestic markets was expected to increase by more than 100% on 1 April,” a post on X by the Ministry of Petroleum and Natural Gas said.

Earlier, a PTI report said the price of aviation turbine fuel (ATF), or jet fuel, was more than doubled to a record ₹2.07 lakh per kilolitre on Wednesday, but domestic airlines will not have to pay the steep increase, as a mechanism is in place to shield them.

“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 Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% (only Rs.15/litre) to the airlines. Foreign routes will pay for the full increase in ATF prices consistent with what they pay in other parts of the world,” the post by the Ministry said.

Alongside, commercial LPG rates were raised by ₹195.50 per cylinder, mirroring the surge in global oil prices linked to the widening West Asia war, the news agency said.

ATF price in Delhi was hiked by ₹110,703.08 per kilolitre, or 114.5 per cent, to ₹207,341.22 per kl, according to state-owned fuel retailers.

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ATF, being a completely deregulated product, is priced at prevailing benchmark international prices. This is in accordance with a written understanding with the airlines, news agencies said.

So the new rates will apply for any international airline refuelling in India from Wednesday, industry sources told news agency PTI.

Domestic airlines shielded

Domestic airlines, however, will not have to pay the steep rates, as a mechanism is in place to prevent the entire burden from being passed on to them, the PTI report said

Union Minister of Civil Aviation, Ram Mohan Naidu Kinjarapu, thanked Prime Minister Narendra Mod and Union Petroleum Minister Hardeep Puri for their timely intervention.

“This calibrated approach will help shield passengers from sharp fare increases, ease the burden on domestic airlines, and support the continued stability of the aviation sector at this crucial juncture. It will also benefit the broader economy by ensuring the smooth movement of cargo and maintaining vital air connectivity for trade and logistics,” Ram Mohan said in a post on X.

This is the first time ever that the ATF price has crossed ₹2 lakh per kl mark. The previous peak was in 2022 when rates were hiked to ₹1.1 lakh per kl after oil prices surged after Russia invaded Ukraine.

This is the second monthly rate increase. Prices on March 1 were hiked by 5.7 per cent ( ₹5,244.75 per kl).

In order to insulate the domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies have passed only a partial and staggered increase of 25%.

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.

(With agency inputs)

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