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Rediff.com  » Business » Airfares may rise as jet fuel gets costlier

Airfares may rise as jet fuel gets costlier

September 02, 2013 16:44 IST

Jet fuel (ATF) prices have been hiked by a steep 6.9 per cent, taking the rates to lifetime high of Rs 75,031 per kilolitre.

ATF had last scaled the high of Rs 71,028.26 per kl in August 2008 but four consecutive increases since June this year that had been necessitated by falling rupee, has seen the fuel price break all records.

Aviation Turbine Fuel, or ATF, price at Delhi was hiked by Rs 4,827.94 per kl, or 6.87 per cent, to Rs 75,031.09 per kl, according to Indian Oil Corp, the nation's largest fuel retailer.

The increase has been effected from September 1. The hike comes on back of a steep hikes on July 1 and August 1. ATF price was increased by Rs 3,617.84 per kl or 5.8

per cent on July and by another Rs 4,169.4 per kl, or 6.3 per cent, on August 1. Prior to these, rates had climbed to Rs 62,416.16 per kl on June 1 from Rs 62,649.95 previously.

These hikes follow two steep reduction in rates - by 5.5 per cent (Rs 3884.98 per kl) on April 1 and 5.3 per cent or Rs 3,545.94 per kl from May 1. ATF price in March had touched Rs 70,080.87 per kl in Delhi.

Officials said the current increase follows continuing fall in rupee against the US dollar, which made import of raw material (crude oil) costlier. In Mumbai, jet fuel is costing Rs 77632.43 per kl from Sunday as against Rs 72,477.50 per kl previously.

Rates at different airports vary because of difference in local sales tax or VAT.

Jet fuel constitutes over 40 per cent of an airline's operating costs. No immediate comments were available from the airlines on the impact of the price hike on passenger fares.

The three fuel retailers -- IOC, Hindustan Petroleum and Bharat Petroleum -- revise jet fuel prices on the 1st of every month, based on the average international price in the preceding month. 

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