Aviation turbine fuel (ATF) prices skyrocket to a record high after the steepest ever rate increase of 16 per cent across the country, according to a notification from oil marketing companies on Thursday.
That ATF price hike comes into effect from today.
Jet fuel prices have now reached an all-time high with the latest hike, suggesting a steep rise in airfares would follow soon.
The price of aviation turbine fuel (ATF) — the fuel that helps aeroplanes fly — has been increased by Rs 19,757.13 per kilolitre, or 16.26 per cent, to Rs 1,41,232.87 per kl (Rs 141.2 per litre) in the national capital, according to a price notification of state-owned fuel retailers.
Rates differ from state to state, depending on the incidence of local taxation.
ATF will now cost Rs 1,46,322.23 per kl in Kolkata, Rs 1,40,092.74 per kl in Mumbai and Rs 1,46,215.85 per kl in Chennai. ATF prices were last revised on June 1.
The hike, which comes on the back of a marginal 1.3 per cent (Rs 1,563.97 per kl) 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 $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 of benchmark international rates.
Jet fuel prices are directly linked to global crude oil prices, which have risen sharply since the Russia-Ukraine war broke out in February this year.
Owing to the Coronavirus pandemic, airlines have suffered losses in the last two years and with the steady rise in jet fuel prices, their profit margins are also likely to be affected.
ATF makes up 30 per cent to 40 per cent of the airlines’ running cost.
Passengers will have to pay more for their air tickets. Airfares have risen sharply this year, as domestic airfares in May were up by 50 per cent to 75 per cent on popular routes as compared to the year-ago period.
Reuters reported that SpiceJet said it was raising fares as much as 15 per cent to counter high fuel costs and a weak rupee, which it says are making the cost of operations unsustainable.