NEW DELHI: Oil marketing companies on Wednesday sharply raised prices of aviation turbine fuel (ATF) to record high of over ₹1 lakh per kilolitre (kl).
In a first, ATF prices were hiked by a steep 18.3% to ₹1,10,666.29 per kl in the national capital. In Kolkata, Mumbai and Chennai, jet fuel is priced at ₹1.14 lakh, 1.09 lakh, and ₹1.14 lakh per kiloliter, respectively. Prices are revised every fortnight.
Jet fuel prices comprise 30-40% of the cost of running an airline in India and an increase in prices will hurt profit margins of airlines which have reported huge losses over the last few quarters due to the coronavirus pandemic.
The steep increase in jet fuel prices comes in the backdrop of a surge in global crude oil prices.
Brent crude is currently at $102.10 per barrel, up 2.19% from its previous close. Prices, however, have declined from the 7 March high $139.13 per barrel, the highest since 2008.
Hopes of easing tensions between Russia and Ukraine have calmed the global oil market. Ukrainian president Volodymyr Zelensky early on Wednesday said while positions of Kyiv and Russia at peace talks sound more realistic, time is still required.
Also, a fresh surge in covid-19 cases and ensuing restrictions in China have raised demand concerns, weighing on crude prices.
Jet fuel prices have been hiked six times this year. Unlike ATF, petrol and diesel prices continue to remain steady for over four months now, despite increasing under-recoveries for oil market companies.
On Wednesday, retail price of petrol in Delhi was unchanged ₹95.41 a litre, while diesel sold for ₹86.67 per litre.
On Monday, minister of state for petroleum and natural Gas, Rameswar Teli said that the Union government was ready to take appropriate actions to mitigate the volatility and the impact of high oil prices. He said the government was monitoring global energy markets as well as potential supply disruptions as a fallout of the evolving geopolitical situation.
