Steepest ever hike: ATF price crosses Rs 1 lakh per kilo litre; flying to get costlier - Times of India

Steepest ever hike: ATF price crosses Rs 1 lakh per kilo litre; flying to get costlier – Times of India

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NEW DELHI: Flying is all set to get more expensive for passengers — and survival a lot tougher for weakened-by-pandemic airlines — with oil PSUs hiking aviation turbine fuel (ATF) by the steepest ever 18% (in one go) on Wednesday.
Following the sixth straight hike this year, jet fuel is dearer by 50% from January 2022 and has crossed the Rs 1 lakh mark per kilo litre (KL or 1,000 litres) mark for the first time in India.
The Ukraine crisis has made crude dearer and with politically sensitive petrol and diesel not being revised for over four months now, ATF has been seeing a disproportionate hike.
Apart from some states not cutting tax rates on jet fuel, the centre is also not reducing excise.
Now ATF in Delhi for domestic flights will cost Rs 1,10,666.29 per KL after the over 18% hike of Rs 17,135.63.
In Mumbai it will cost Rs 1,09,119.83. The previous high of Rs 71,028.26 per KL was in August 2008, when international crude oil prices had touched $147 per barrel.
While crude oil on Wednesday was trading just above $100 per barrel, two factors — a weaker rupee and no hike in petrol and diesel — led to ATF skyrocketing.
IndiGo CEO Ronojoy Dutta said: “Over the past few weeks, crude oil prices have soared to a 7-year high nearing $140 per barrel, due to the ongoing conflict in Europe. This has resulted in over 50% ATF price hike from January 2022 till date, including the 18% hike (on Wednesday). This situation adversely impacts us, given that ATF constitutes over 45% of our operational costs.”
“We have been in talks with the government to bring ATF under GST as it brings the benefit of input tax credit. We believe that such measures are needed now more than ever to offset this increase in cost and make flying viable for airlines and affordable for consumers. A rationalisation of taxes will result in high growth for the sector, creating a multiplier effect throughout the economy, promoting trade, tourism and job creation,” Dutta added.
Since domestic fare caps are still in place, airlines are likely to seek an upward revision in the same. Till that happens, getting tickets at lower fare buckets will get increasingly rare.
Petrol and diesel prices remained unchanged for a record 132nd straight day on Wednesday. The daily price revision was put on hold on November 4, 2021, just before the recent assembly election in states like UP and Punjab.
Cooking gas LPG prices too have been on freeze since October, when they touched Rs 900 per cylinder.



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