ATF price up marginally, 8th hike in year

The rising prices of jet fuel has put pressure on Indian carriers and representations have gone to FM Sitharaman on lowering excise duty

In the eight such hike in a year, aviation fuel prices on Saturday were increased by Rs 277.5 to Rs 1,13,202.33 per kilo litre or Rs 113 per litre. This is the eighth rise in the year and second in a month's time.

A close look at price rise on fuels and gas since the past month reveals petrol and diesel were costlier by Rs 10 a litre since last month, CNG was dearer by Rs 14 a kilo and piped natural gas was dearer by Rs 10. The domestic LPG rates too rose by Rs 25 per cylinder, developments that could see a further spike in inflation in the coming months.

Also read: Fuel prices send airfares higher, but travelers seem ready to pay

In India, fuel prices have been rising continuously due to rising prices of crude oil globally and renewed supply concerns arising out of prolonged Russia-Ukraine war. The demand for transport fuel has also increased in the country post the Covid pandemic. India imports over 85% of its fuel needs.

Jet fuel makes up for almost 40% of the running cost of an airline. The rising prices of jet fuel has put tremendous pressure on Indian carriers and representations have gone to Finance Minister Nirmala Sitharaman on lowering excise duty on jet fuel.

Although petrol and diesel prices have not been hiked for the past 10 days. Prior to that, in a back to back increase, the prices of two fuels have gone up by Rs 10 per litre each.

The hike in diesel prices has a direct impact on inflation, which has already crossed the Reserve Bank of India's upper tolerance band of 6%. Retail inflation climbed to a 17-month high in March to 6.95% led by costlier food items.

Inflation is unlikely to come down unless crude oil prices fall significantly.

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