Calibrated ATF Increase Shields Airlines Yet Passengers May Pay More

Aviation turbine fuel prices for domestic airlines were raised by a calibrated 8.5 per cent on Wednesday, instead of more than doubling as warranted by a war-driven surge in global oil prices.

Civil Aviation Ministry Joint Secretary Asangba Chuba Ao said the government’s decision to allow only a partial increase of 25 per cent on Aviation Turbine Fuel prices for domestic airlines provides "critical relief" and will "prevent a potential industry-wide crisis".

ATF for domestic carriers was hiked by ₹8,289.04 per kilolitre, or 8.56 per cent, to ₹1,04,927.18 per kl from ₹96,638.14 per kl last month, according to state-owned oil firms.

He further said the intervention will ensure that airlines will now calibrate their pricing and pull back fuel surcharges, while noting the impact of military escalation in the Middle East on the global energy market.

Why are ATF prices for foreign airlines rising over 114% while domestic carriers pay less?

Domestic airlines will pay half of what foreign airlines and other operators such as non-scheduled, ad hoc and charter services will pay. For these carriers, prices have risen by ₹1,10,703.08 per kl, or 114.5 per cent, to ₹2,07,341.22 per kl.

The Ministry of Petroleum and Natural Gas said the move comes in response to an "extraordinary situation in global energy markets," triggered by the closure of the Strait of Hormuz.

To prevent a steep rise in airfares, public sector oil marketing companies, in consultation with the Ministry of Civil Aviation, implemented only a partial and staggered increase.

By Wednesday evening, IndiGo announced revised fuel charges ranging from ₹275 to ₹10,000, pushing airfares higher for many domestic and international flights amid the rise in jet fuel.

Rates for commercial LPG and premium petrol were also increased amid firm energy trends. The price of commercial LPG was raised by ₹195.50 per 19 kg cylinder.

The price of select premium petrol and diesel, which account for 2 to 5 per cent of total auto fuel sales, was also increased. Extra Green diesel rose by ₹1.50 a litre to ₹92.99, while 100 octane petrol XP100 saw an increase of ₹11 per litre to ₹160.

Prices of unbranded petrol and diesel remain unchanged, as do rates of domestic cooking gas LPG.

(With inputs from ANI)