The Central government on Friday hiked jet fuel prices by a little over 14 per cent, the third straight monthly hike, data showed. Aviation turbine fuel (ATF) prices were hiked by 8.5 per cent in August and 1.65 per cent in July, according to a price notification of state-owned fuel retailers.
Prior to that, rates had been cut on four occasions.
ATF prices in Delhi were hiked to Rs 1,12,419.33 per Kl for domestic airlines from Rs 98,508.26 a month ago. For international airlines, ATF prices stood at $1,031.29/Kl from $902.62/Kl. Mumbai also witnessed a similar hike, as prices stood at Rs 1,05,222.13 per Kl for domestic airlines, up from Rs 92,124.13 a month ago. For international airlines, ATF prices in Mumbai were revised to $1,029.21 from $900.73 in August.
ATF prices for domestic airlines in Kolkata and Chennai stood at Rs 1,21,063.83 and Rs 1,16,581.77 per Kl as of September 1 while for international airlines, the rates stood at $1,069.46 and $1,026.45 respectively.
State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise cooking gas and ATF prices on the 1st of every month based on the average international price in the previous month.
The average ATF prices were at Rs 95,906/kilo litre in the first five months of this financial year as against Rs 1,21,013/kilo litre in FY23 and Rs 64,715/kilo litre in FY2020.
According to rating agency ICRA, the domestic aviation industry continues to face challenges despite witnessing a healthy recovery in air passenger traffic because of sequential increase in aviation turbine fuel (ATF) prices and depreciation of the value of rupee against the US Dollar. Yet, the Indian airlines are expected to see a sharp drop in net losses to Rs 5,000-7,000 crore this fiscal as they continue to witness healthy passenger traffic growth and improvement in their revenue, ICRA said in its report.
Passengers have faced a steady uptick in flight prices in recent months, at a time when two domestic carriers — IndiGo and Air India Ltd. — are set to control the bulk of one of the world’s fastest-growing aviation markets, while most smaller rivals struggle to stay afloat in the notoriously competitive market.
Higher aviation fuel prices also pose a risk to low-cost travel. Global oil prices have climbed more than 15% in the past two months.
