Government has today announced 14 percent increase in jet fuel prices, also known as aviation turbine fuel (ATF). This move pushes the price to Rs 1.12 lakh per kilo litre in Delhi, marking the highest point since December 2022. The recent pattern of escalating ATF prices continues, with this being the third consecutive monthly increase. Over the last three months, the cost of aviation turbine fuel has witnessed a substantial surge of 26 percent, demonstrating a notable impact on the aviation industry.
This latest price revision comes a month after the previous alteration in jet fuel prices, underscoring the rapid fluctuations in the market. The crux of this adjustment can be attributed to the ascension of crude oil prices, which has been mirrored in the price of India's crude oil basket.
The month of August alone witnessed 7.5 percent hike, while the preceding two months contributed to an 15 percent surge, propelling the price to $86.37/barrel.
The domino effect of these pricing dynamics is particularly critical for Indian carriers, as they remain highly attuned to any shifts in jet fuel costs. A 40 percent of their operating expenses are attributed to jet fuel, thereby making them significantly sensitive to such fluctuations. In Mumbai, the new rate for aviation turbine fuel now stands at Rs 1.05 lakh per kilo litre. Meanwhile, in Kolkata, it has surged to Rs 1.21 lakh, and in Chennai, the price now rests at Rs 1.16 lakh per kilo litre.
First Published: Sept 1, 2023 9:12 AM IST
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