'Only a partial, staggered increase': Government issues clarification on jet fuel price hike

NEW DELHI: The central government issued clarification on jet fuel price hike as it capped the increase in aviation turbine fuel (ATF) prices for domestic airlines to 25% on Wednesday. Citing tensions in the Middle East and closure of the Strait of Hormuz triggered by US-Israeli strike on Iran, the Centre called it "only a partial and staggered increase"."ATF prices in India were deregulated in 2001 and are revised on monthly basis based on a formula of international benchmarks. Due to the closure of Strait of Hormuz and extraordinary situation in global energy markets, price of ATF for domestic markets was expected to increase by more than 100% on 1 April," Ministry of Petroleum and Natural Gas said in a post on X."In order to insulate the domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies of the Ministry of Petroleum, in consultation with Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% (only Rs.15/litre) to the airlines. Foreign routes will pay for the full increase in ATF prices consistent with what they pay in other parts of the world," it added.Jet fuel prices for scheduled Indian airlines have risen by around 8.5% in April, helping avoid a sharp increase in airfares for most passengers. In Delhi, aviation turbine fuel (ATF) now costs Rs 1,04,927 per kilolitre, up from Rs 96,638.14 last month. At the country’s second-busiest hub, the price has increased to Rs 98,247 from Rs 90,451.87. The relatively moderate hike comes as a relief for financially strained airlines as well as flyers. However, the situation is very different for non-scheduled, ad hoc, and charter operators, where jet fuel prices have more than doubled. For domestic flights in this segment, ATF prices have surged by about 115%, while international operations have seen an increase of roughly 107%.