ATF for international airlines cut 27%; commercial LPG, 5-kg cylinder prices raised

Aviation Turbine Fuel (ATF) prices for international airlines were cut by a steep 27% in monthly revision on Monday, June 1, offering significant relief to overseas carriers as global fuel benchmarks eased. ATF rates for domestic airlines, however, were left unchanged for a second consecutive month.

The reduction lowers jet fuel prices for international carriers by more than $400 per kilolitre to about $1,100 per kl, industry sources said.

Rates for these airlines had risen by $76.55, or 5.33%, to $1,511.86 per kl on May 1 after increasing more than two-fold in April to $1,435.31 amid a surge in international energy prices.

Domestic carriers will continue to pay ₹104,927.18 per kilolitre for ATF, the rate that became applicable on April 1, when only a fourth of the required increase was passed on to airlines. The prices have remained unchanged since then.

Despite a rise in international rates, state-owned fuel retailers had held prices steady in May, absorbing the higher international costs to avoid passing on the burden to passengers.

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Now when international rates have softened, they have passed on the reduction to overseas carriers while continuing to suffer losses on domestic supplies.

Separately, oil marketing companies raised commercial LPG prices by ₹42 per 19-kg cylinder, pushing rates to a record high. The cylinder used by hotels, restaurants and other commercial establishments will now cost ₹3,113.50 in Delhi, up from Rs 3,071.50 previously.

The latest increase follows a sharp ₹993 hike implemented on May 1, taking commercial LPG prices to their highest-ever levels.

Prices of 5-kg free-trade LPG (FTL) cylinders were also increased by ₹11 to ₹821.50 per cylinder.

Household consumers were spared any increase, with the price of the 14.2-kg domestic LPG cylinder remaining unchanged at ₹913 since early March when rates were increased by ₹60 per bottle.

The revisions are part of the monthly price review undertaken by state-owned oil marketing companies.

Prices vary from state to state depending on the incidence of local taxes such as VAT.

Sources said ATF for domestic carriers continues to be priced below cost.

There was no change in prices of petrol and diesel after rates went up by about ₹7.50 per litre last month. Petrol currently costs ₹102.12 per litre in Delhi and diesel ₹95.20.

Airlines across the world are facing disruptions amid a tightening jet fuel supply, triggered by the ongoing war in West Asia. The Strait of Hormuz – a critical conduit for global energy flows – remains effectively closed as the conflict enters its fourth month, further straining fuel availability and supply chains.

In India, jet fuel prices were deregulated more than two decades ago, and since then, the rates have been aligned with benchmark international prices, as per a written understanding with the airlines.

But since the West Asia war-induced surge in global energy prices warranted the steepest increase ever to be made in the ATF prices, the government and state-owned oil companies decided to adopt a calibrated approach, industry sources said.

While foreign airlines and other carriers would pay market rates, prices for domestic airlines have been moderated, they said.

In keeping jet fuel prices unchanged for domestic airlines, state-owned IOC, Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) will definitely book under-recoveries or losses on such fuel sales.

They would also have similar losses on petrol, diesel and domestic LPG. These stood at around ₹650 crore a day in May, according to the oil ministry.