Jet Fuel Price Slashed: The prices of aviation turbine fuel or ATF, that is required to run an aeroplane, was decreased by 1.3 per cent, state owned Indian Oil Corporation (IOCL) announced on Wednesday, June 1. After the jet fuel price reduction, the same will cost Rs 121,475.74 per kilolitre (Kl)in Delhi, according to a notification by the Indian Oil Corporation. The latest announcement has reduced the price of ATF from an all time high, which had seen airlines across the country reeling under pressure.
While ATF price in Delhi today stands at Rs 1,21,475.74 per KL, the jet fuel price in Mumbai is standing at Rs 1,20,306.99 per KL. On the other hand, ATF price in Kolkata today is at Rs 126,369.98 per kilolitre, while the same in Chennai is trading at Rs 125,725.36 per kilolitre. The state owned fuel company has said that this has come into effect from June 1, which is today.
ATF Prices in Recent Times and Impact on Air Travel
Earlier on May 16, Indian Oil Corporation had announced a hike in jet fuel prices by 5 percent, taking it to Rs 1.23 lakh per kilolitre in Delhi. Before that, jet fuel prices were hiked by Rs 3,649.13 per kilolitre, or 3.22 per cent, to Rs 1,16,851.46 per kilolitre (Rs 116.8 per litre) in the national capital. Following a steep rise in the prices of crude oil, aviation turbine fuel (ATF) prices had been hiked 61.7 per cent from Rs 72,062 per kl to Rs 1.23 lakh per kl since January.
The ATF prices right now are still much higher than that of the January level, and may not impact the prices of air tickets in the near future. The recent rise in ATF prices have also impacted air travel greatly, as airline companies are seeing a loss due to the exorbitant prices.
In a recent interview with PTI, IndiGo CEO Ronojoy Dutta said the Ministry of Civil Aviation should consider increasing the upper limits on domestic airfares amid rising fuel prices. Jet fuel prices make up for 40 per cent of operating an aeroplane.
First, there was the uncertainty of the COVID-19 pandemic and now these very abnormal fuel prices, he said. “If anything, the higher band needs to be moved up because, you know, we just need to keep the fares at pace with fuel prices and fuel prices are a real problem.
“I mean, every month they’re going up 11 per cent, six per cent and so forth. So, no airline can survive with these high fuel prices if you don’t raise fares,” he added. Dutta further said, “We are obviously for a free market. Let the market decide what the right fare is.” .
ATF prices differ from state to state, depending on the incidence of local taxation. Jet fuel prices are revised on the 1st and 16th of every month based on crude oil rates in the international market. Fuel rates in India have increased because energy prices globally have risen due to supply disruptions amid the Russia-Ukraine war.
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