Prices of aviation turbine fuel (ATF) surged sharply on Wednesday, more than doubling to a record Rs 2.07 lakh per kilolitre, driven by rising global crude oil rates amid escalating tensions in West Asia.
According to state-owned fuel retailers, ATF prices in Delhi were increased by Rs 1,10,703.08 per kilolitre, marking a steep rise of 114.5 per cent, taking the rate to Rs 2,07,341.22 per kl, the highest level recorded so far.
Despite the sharp hike, domestic airlines are expected to be insulated from the full impact, with a mechanism being worked out to cushion them from the burden.
Industry sources indicated that while international carriers refuelling in India will pay the revised rates from Wednesday, domestic operators may not be required to absorb the entire increase. Details of the proposed mechanism, however, are yet to be formally announced.
ATF prices in India are deregulated and are linked to benchmark international fuel rates, as per an existing arrangement with airlines.
This is the first instance of ATF prices breaching the Rs 2 lakh per kl mark. The previous peak was recorded in 2022, when prices touched about Rs 1.1 lakh per kl following the surge in global oil prices after the Russia-Ukraine conflict.
The latest revision also marks the second consecutive monthly increase. On March 1, prices had been raised by 5.7%, or Rs 5,244.75 per kl.
The increase is expected to add to the financial strain on airlines, which are already contending with higher fuel consumption due to longer flight paths necessitated by airspace restrictions linked to ongoing conflicts.
Fuel costs typically account for around 40 per cent of an airline’s operating expenses.
(With inputs from PTI)