Jet fuel prices on Thursday were hiked by the steepest ever 16 percent to catapult rates to an all-time high in step with hardening international oil rates.
The price of aviation turbine fuel (ATF) — the fuel that helps airplanes fly — has been increased by Rs 19,757.13 per kilolitre, or 16.26 percent, to Rs 1,41,232.87 per kg (Rs 141.2 per liter) in the national capital, according to a price notification of state-owned fuel retailers.
The hike, which comes on the back of a marginal 1.3 percent (Rs 1,563.97 per kg) cut in rate earlier this month, takes jet fuel prices to record high across the country.
The increase is in step with firming international oil rates. Brent – the world’s most popular crude oil benchmark – was on Thursday trading at USD 119.16 per barrel – the highest in almost a decade.
ATF prices are revised on the 1st and 16th of every month based on the average benchmark international rates.
The increase in jet fuel price will raise the operating cost for airlines. ATF makes up to 40 percent of an airline’s operating cost.
The June 1 reduction had come after 10 rounds of price increases this year.
ATF in Mumbai now costs Rs 1,40,092.74 per kl, while it is priced at Rs 1,46,322.23 in Kolkata and Rs 1,46,215.85 in Chennai.
Rates differ from state to state, depending on the incidence of local taxation.
Meanwhile, petrol and diesel prices remained unchanged at Rs 96.72 per liter and Rs 89.62 a liter, respectively. An excise duty cut by the government had helped reduce petrol by Rs 8.69 a liter and diesel by Rs 7.05 per liter on May 22, but for that, the base price has remained unchanged since April 6. Before that, prices had risen by a record Rs 10 per liter each.
The retail prices of petrol, diesel, and domestic cooking gas are way below the cost.
Petrol and diesel rates are revised daily, based on equivalent rates in the international market.
Fuel rates have been on the rise in India because energy prices globally have risen on the back of supply concerns following, Russia’s invasion of Ukraine and demand returning after being hit by the pandemic. India is 85 percent dependent on imports to meet its oil needs.
To compound things, the rupee has depreciated against the US dollar, making imports costlier.