For the 12th time since October 2010, state-owned oil companies on Friday hiked aviation turbine fuel (ATF) prices. The range of price increase is around Rs 850-1,000 per kilolitre in various cities.
ATF prices in Delhi has increased by Rs 846.87 a kilolitre to Rs 59,157.32 a kilolitre, according to officials of Indian Oil Corporation. The increase comes soon after the 6.14 per cent increase in ATF rates which came into effect from March 16 in line with rising crude oil prices.
In Mumbai, jet fuel will now cost Rs 59,900.02 a kilolitre after the latest hike, an increase of Rs 869. The largest hike was in Chennai, where prices were hiked by Rs 996 at Rs 63,623 a kilolitre. The next largest hike was in Kolkata where prices were increased by Rs 950 at Rs 67,152 a kilolitre.
Since October, ATF prices have gone up by about Rs 20,000 or 45.2 per cent in Delhi alone. In October 2010, jet fuel prices were Rs 40,728.52 a kilolitre. Jet fuel accounts for 40 per cent of the airlines' operating costs.
Fare impact
The latest hike is likely to have a direct impact on air fares. Though none of the airlines commented on the immediate impact, SpiceJet, Kingfisher and Jet Airways had recently said that an increase in ATF charges would force them to increase airfares or fuel surcharges.
Last month, Mr Sudheer Raghavan, Chief Commercial Officer of Jet Airways, had said that the airline was passing on the burden of higher ATF prices by adjusting the fuel surcharge, while Mr Neil Raymond Mills, Chief Executive Officer of SpiceJet, had said fares would need to go up by Rs 600-700 in order for airlines to break even.
IOC and other public sector retailers Bharat Petroleum and Hindustan Petroleum revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.