Significant Drop in International Jet Fuel Prices Offers Relief to Airlines
International Jet Fuel Price Reduction
Representational image of an aircraft on the runway. (Photo:X)
New Delhi, June 1: The price of Aviation Turbine Fuel (ATF) for international airlines has been slashed by an impressive 27% in the latest monthly review, providing substantial relief to global carriers as international fuel prices have decreased.
In contrast, the ATF prices for domestic airlines have remained unchanged for the second month in a row.
This reduction translates to a decrease of over USD 400 per kilolitre, bringing the cost for international airlines down to approximately USD 1,100 per kl, according to industry insiders.
Previously, on May 1, ATF rates for these airlines had surged by USD 76.55, or 5.33%, reaching USD 1,511.86 per kl, following a significant increase in April to USD 1,435.31 due to rising international energy prices.
Domestic airlines will continue to incur a cost of Rs 104,927.18 per kilolitre for ATF, a rate that has been in effect since April 1, when only a fraction of the necessary increase was passed on to them. This price has remained stable since then.
Despite the rise in international prices, state-owned fuel retailers opted to keep domestic prices steady in May, absorbing the increased costs to prevent passing them on to passengers.
Now that international prices have softened, these retailers have decided to extend the benefits of the reduction to international carriers while still facing losses on domestic supplies.
In a separate development, oil marketing companies have increased the price of commercial LPG by Rs 42 for a 19-kg cylinder, marking a new record high. The cost for commercial establishments, including hotels and restaurants, will now be Rs 3,113.50 in Delhi, up from Rs 3,071.50.
This latest hike follows a substantial increase of Rs 993 implemented on May 1, which brought commercial LPG prices to unprecedented levels. Additionally, the price of 5-kg free-trade LPG (FTL) cylinders has risen by Rs 11, now costing Rs 821.50 each.
Fortunately, household consumers have not faced any price hikes, as the cost of the 14.2-kg domestic LPG cylinder has remained steady at Rs 913 since early March, when it was raised by Rs 60.
These adjustments are part of the monthly price review conducted by state-owned oil marketing companies, with prices varying by state due to local taxes like VAT.
Globally, airlines are experiencing disruptions due to a tightening supply of jet fuel, a situation exacerbated by the ongoing conflict in West Asia.