The Indian government on Friday increased the price of Aviation Turbine Fuel (ATF) for international airlines by 5 percent, marking the second straight monthly rise amid the ongoing global energy crisis. However, there is no change in the ATF price for domestic airlines.
Price Details
ATF prices have been increased by USD 76.55 per kilolitre, or 5.33 percent, to USD 1,511.86 per kilolitre in Delhi, according to state-owned oil firms. Under this mechanism, foreign airlines and other carriers will pay market-linked rates, while prices for domestic airlines have been moderated, as reported by news agency PTI citing sources.
Earlier on April 1, rates for domestic airlines were hiked by 25 percent to Rs 104,927.18 per kilolitre. Jet fuel prices were deregulated more than two decades ago and have since been linked to international benchmark rates under a written understanding with airlines.
Global Energy Crisis Impact
A surge in global energy prices triggered by the West Asia crisis led to what sources described as the steepest-ever hike in ATF rates, prompting the government and state-run oil companies to take a calibrated approach. The increase reflects the ongoing volatility in international oil markets, which have been impacted by geopolitical tensions and supply constraints.
The government's decision to shield domestic airlines from the latest hike while passing on the increase to international carriers is part of a strategy to balance the needs of the aviation sector with broader economic considerations. Domestic airlines had already faced a significant hike in April, and the government is monitoring the situation closely to avoid further strain on the industry.
Industry experts note that the deregulation of jet fuel prices has allowed for greater flexibility in pricing, but the recent spikes have highlighted the vulnerability of the aviation sector to global energy shocks. The calibrated approach aims to mitigate the impact on domestic carriers while ensuring that international airlines pay market rates.
The TOI Business Desk, a vigilant team of journalists, continues to track developments in the energy and aviation sectors, providing readers with timely updates and analysis on market trends and policy changes.
