Your Air Tickets Will Become Expensive As Prices Of Jet Fuel Reach Record High

Air travel will soon become costlier after oil marketing companies raised the aviation turbine fuel (ATF) prices.

Rates were increased by 5.2% in line with a rise in international oil prices.

Fourth Hike

This is the fourth hike in ATF prices in less than two months following a spike in global oil prices.

  • January 1: Rates were hiked by Rs 2,039.63 per kl or 2.75% to Rs 76,062.04 per kl
  • January 16: Rates were hiked by Rs 3,232.87 per kl (4.25%) to Rs 79,294.91
  • February 1: They went up by Rs 6,743.25 per kl or 8.5% to Rs 86,038.16

Petrol And Diesel Prices Unchanged

However, petrol and diesel prices remained unchanged for a record 103rd day in a row, coinciding with elections in states like Uttar Pradesh and Punjab.

Some states have been cutting their tax rates on ATF but not those housing the biggest hubs like Delhi and Mumbai airports.

Hikes In Metros

The ATF price in Delhi was raised from Rs 86,038.16 per kilolitre to Rs 90,519.79 per kilolitre.

This is a hike of Rs 4,481.63 per kilolitre or 5.2%, a record high in 14 years when the rate was Rs 71,028.26 per kl, reached in August 2008 when international crude oil prices touched $147 per barrel.

Metros such as Kolkata, Mumbai and Chennai also saw a price hike to Rs 94,888.70, Rs 88,987.20 and Rs 93,371.18 per kilolitre, respectively.

Aviation Industry Financially Battered

This is expected to hit aviation companies’ finances that are already under huge stress amid high debt.

Fuel retailers revise jet fuel prices on a fortnightly basis, on the 1st and 16th of every month, based on the average price of the international benchmark in the preceding fortnight.

At present. India levies some of the world’s highest rates of tax on the ATF which massively drives up the fuel cost component.

Ministry Asked To Raise Cap Or Industry Will

Fuel based expenses presently account for over 30% of an airlines overall operating costs since India has among the most expensive jet fuel for domestic flights globally.

The aviation industry has been pleading with the government to bring fuel type in the ambit of GST, similar to the status given to ‘Bunker Diesel’ which is used in the shipping sector.

Officials across airlines say that the aviation ministry should now automatically raise domestic fare caps or the industry will ask for the same.