Public sector oil marketing companies (OMCs) on Monday reduced the rate of aviation turbine fuel (ATF) for international airlines by 27 per cent, providing considerable relief to foreign carriers as global fuel benchmarks eased. However, the rate for domestic carriers was left unchanged for the second consecutive month.
According to industry sources, the reduction has brought down the cost of jet fuel for international carriers by over $400 per kilolitre (kl) to nearly $1,100 per kl. On May 1, the rate for these airlines was raised by $76.55, or 5.33 per cent, to $1,511.86 per kl after more than being doubled to $1,435.31 in April due to a spike in global energy prices. Domestic carriers will continue to pay Rs 104,927.18 per kl for ATF.
State-owned fuel retailers had maintained prices in May despite an increase in international rates, absorbing the extra cost to avoid passing it on to customers. Now, when the international cost has reduced, they have passed on the reduction to foreign airlines, while continuing to face losses on domestic supplies.
Commercial LPG Hits Record High
Meanwhile, commercial LPG rates hit a record high after OMCs increased the cost by Rs 42 per 19-kg cylinder. In Delhi, the cylinder used by hotels, dining places, and other businesses will now cost Rs 3,113.50 instead of Rs 3,071.50. The latest hike comes after a steep increase of Rs 993 on May 1. Additionally, the cost of 5-kg free-trade LPG cylinders has been raised by Rs 11 to Rs 821.50 per cylinder.
Household consumers have been spared any increase, with the price of the 14.2-kg housing LPG cylinder remaining unchanged at Rs 913 since the rate was raised by Rs 60 per cylinder in early March. The changes are part of the monthly price review by state-owned oil marketing firms. Prices differ from state to state, depending on local taxes such as VAT.
Congress Revives 'Inflation Man' Jibe
The Congress on Monday targeted Prime Minister Narendra Modi over the fresh hike in commercial LPG cylinder rates, reviving its 'inflation man' jibe and accusing the Centre of burdening businesses and consumers with repeated price increases. In a post on X, the Congress claimed that commercial LPG cylinder prices had increased by nearly Rs 1,572 in the past five months.
Impact of West Asia Conflict
The prolonged conflict in West Asia has led to a shortage of jet fuel, causing difficulties for airlines worldwide. As the battle moves into its fourth month, the Strait of Hormuz, a vital route for international oil supplies, remains closed, substantially straining fuel supply networks and availability. According to a formal agreement with airlines, jet fuel prices in India have been aligned with benchmark international prices since they were deregulated more than 20 years ago.
