Jet fuel price hits new high; flying may cost more soon - Times of India

Jet fuel price hits new high; flying may cost more soon – Times of India

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NEW DELHI: Flying in India could soon get more expensive as aviation turbine fuel (ATF) prices hit a new record high on Wednesday. Oil companies have hiked jet fuel prices by about 5% and now a kilo-litre (KL, or 1,000 litres) will now cost Rs 90,519.8 and Rs 88,987.2 in Delhi and Mumbai, respectively, for domestic flights.
While crude prices have been surging globally, the ongoing election season means that for now politically sensitive petrol and diesel prices are not being raised for past few weeks. Jet fuel prices, which won’t become an election issue, are seeing a surge as the Centre has not cut excise on the same despite repeated requests from the struggling-to-survive airline industry.
ATF prices had been hiked by Rs 6,743.25 per KL or 8.5 per cent to Rs 86,038.16 per kl in Delhi, at the start of this month. That was the highest ever price touched by ATF in India, before the second fortnightly hike on Wednesday. The previous high was Rs 71,028.26 per kl in August 2008 when international crude oil price had touched $147 per barrel. ATF alone accounts for almost 40% of Indian airlines’ operating cost as the country has among the most expensive jet fuel for domestic flights globally.
Officials across airlines say the aviation ministry should now automatically raise domestic fare caps given the situation or the industry will need to ask for the same. “March 7, 2022, is the last polling date for states currently going to elections. The crude price hike may begin to pinch soon after that when prices start going up,” say people in the know.
ATF prices suffer from a double whammy — high base price by oil companies and then even higher taxes by both the Centre and state. Some states have been cutting their tax rates on ATF but not those housing the biggest hubs like Delhi and Mumbai airports. While crippled-by-the-pandemic airlines have for long been requesting the Centre to cut excise on jet fuel, there has been no respite on that front too.



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