Jet fuel constitutes over 40 per cent of an airline's operating costs and the price cut will bring relief to the cash-strapped carriers.
No immediate comment was available from airlines on the impact of the price hike on passenger fares.
The empowered group of ministers headed by Finance Minister Pranab Mukherjee is being convened soon to discuss a combination of a price hike and a reduction in government duties.
The government on Wednesday ruled out any hike in the prices of LPG and kerosene in the face of war threats hovering over Iraq but said deposit money for LPG cylinders might come down in a couple of days.
Oil marketing companies (OMCs), paint manufacturers, tyre producers, and aviation stocks witnessed significant gains as Brent crude oil prices slipped below $70 per barrel. The price drop came after a double blow: The US imposed tariffs on Canada and Mexico, including energy imports, and OPEC+ - the group of major oil-producing nations including Russia - announced an output increase of 138,000 barrels per day, the first such hike since 2022.
With the losses incurred by oil marketing companies (OMC's) on selling regulated fuels below their market prices (under-recoveries) reaching alarming levels, an urgent corrective action, like hiking the price of diesel, has become imperative, says a Crisil study.
Aviation turbine fuel to now cost more.
A subsidised 14.2-kg cylinder will now cost Rs 425.06 in Delhi as against Rs 423.09 previously, according to State-owned oil firms
The government is unlikely to take up the issue of reducing petrol, diesel and domestic LPG prices on Thursday as consultations on petroleum ministry's simultaneous proposal for freeing auto fuel pricing were not complete.
The Reserve Bank of India on Friday retained its projection for retail inflation at 4.5 per cent for the current fiscal assuming a normal monsoon, while emphasising that uncertainties related to food price outlook warrant a close monitoring. Consumer Price Index (CPI)-based retail inflation has been projected at 4.5 per cent with quarter-wise projections at 4.9 per cent in Q1 (April-June), 3.8 per cent in Q2, 4.6 per cent in Q3, and 4.5 per cent in Q4.
A hike in diesel and domestic LPG prices has been deferred for now, but an increase in petrol prices later this week looks imminent.
Indian Oil Corporation (IOC) on Tuesday reported halving of its March quarter net profit largely because of losses in the petrochemical business and shrinking margin after it announced a pre-election fuel price cut despite rising input costs. The net profit of Rs 4,837.69 crore in January-March compared to Rs 10,058.69 crore a year back and Rs 8,063.39 crore in the preceding October-December quarter, according to a stock exchange filing by the company.
Petrol and diesel prices were on Wednesday hiked in seven states like West Bengal and Maharastra and that of domestic LPG in six states as state-owned oil firms recalibrated rates to reflect changes in local levies.
The three government oil marketing companies, Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, are losing Rs 320 crore a day as they sell at subsidised rates.
Jet fuel (ATF) price on Wednesday was hiked by 4 per cent in line with firming international oil prices but petrol and diesel rates remained on freeze for a record 10th month in running. Aviation turbine fuel (ATF) price was increased by Rs 4,218 per kilolitre, or 3.9 per cent, to Rs 1,12,356.77 per kl in the national capital, according to a price notification of state-owned fuel retailers. The increase follows three rounds of reduction since November.
This is the second straight increase in jet fuel rates in as many months.
With a high-powered ministerial panel on fuel pricing being scrapped, a cabinet committee may consider raising the prices of diesel, LPG and kerosene, Oil Minister S Jaipal Reddy indicated on Wednesday but refused to say when the issue would be taken up.
LPG rates were last hiked on November 1 by Rs 2.05 per cylinder. Prior to that rate was hiked on October 28 by Rs 1.5 per cylinder on account of hike in commission paid to dealers.
This may come as a surprise to many. Retail price inflation in petrol was the lowest at 10.21 per cent in March since November 2020. In diesel, it scraped the bottom of the barrel at 5.19 per cent in the last month of 2021-22 since February 2020. Even liquefied petroleum gas (LPG) was at a nine-month low of 9.97 per cent in the month.
Diesel prices are still under control with subsidies.
Petroleum Minister Mani Shankar Aiyar on Tuesday indicated that the government would increase petrol, diesel and LPG prices, but also cut duties in a bid to contain the impact of surge in international oil prices.\n\n
Today beef, tomorrow namaz, the third day Sunday mass the fourth day hijab, the fifth day halal, the sixth day love jihad will always be the issues on hand, asserts Aakar Patel.
Petrol and diesel prices were hiked by 60 paisa per litre on Monday, for the second day in a row, as State-owned oil firms reverted to daily price revisions after an 83-day hiatus. Petrol price in Delhi was hiked to Rs 72.46 per litre from Rs 71.86 on Sunday, while diesel rates were increased to Rs 70.59 a litre from Rs 69.99, according to a price notification of state oil marketing companies.
In a unique protest against fuel price hike, West Bengal Chief Minister Mamata Banerjee on Thursday rode pillion on an electric scooter to state secretariat Nabanna.
The price of non-subsidised LPG, which customers buy after using up their quota of 12 subsidised cylinders, was raised to Rs 922.50 per 14.2-kg cylinder in Delhi on July 1, the first hike in six months.
While hinting that further cut in petrol and diesel prices was likely during the next revision, Petroleum Minister Ram Naik on Saturday ruled out any possibility of increase in prices of LPG and kerosene
The Congress and NCP workers staged protests against price rise outside a luxury hotel and the Bal Gandharva auditorium, where Irani attended events during her visit to the city.
Raising social security pension amounts, increasing financial assistance given under the 'Rythu Bandhu' investment support scheme for farmers and providing LPG cylinders at Rs 400 each are some of the promises made by the ruling Bharat Rashtra Samiti for the upcoming assembly elections in Telangana.
What could be more uncertain than Virat Kohli's agonising wait for a century for over two years? Perhaps it's what you will pay tomorrow morning to fill your vehicle's tank. Pump prices have joined cricket scores as the country's favourite discussion topic. Steep increases invite widespread protests, while moderate additions make the government anti-reformist. The ongoing fuel price conundrum is no different.
A decision has been taken to gradually initiate Aadhaar and non-Aadhaar based LPG subsidy transfer through the OMCs.
The government may further reduce petrol, diesel and domestic LPG prices just before the General Elections are announced in February, a senior official said.
State-owned fuel retailers are losing close to Rs 3 per litre on selling diesel while the profit on petrol has trimmed due to recent firming up in international oil prices, industry officials said detailing reasons for continuing to hold retail prices. Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), who control roughly 90 per cent of India's fuel market, 'voluntarily' have not changed petrol, diesel and cooking gas (LPG) prices for almost two years now, resulting in losses when input cost was higher and profits when raw material prices were lower.
The government does not seem inclined, at least in the petroleum sector, to effect sudden and steep upward price revisions to tame its huge subsidy burden and rein in fiscal deficit.
A price reduction may be considered if crude oil falls to $61 per barrel, he said. The basket of crude oil India buys was at this year's lowest of $68.81 per barrel. Indian Oil, Bharat Petroleum and Hindustan Petroleum are currently losing about Rs 280 crore (Rs 2.8 billion) per day on sale of petrol, diesel, domestic LPG and kerosene as government has not allowed them to align retail prices with cost of production.
The ministry is preparing a draft note for consideration of the CCPA on pricing of diesel, kerosene and LPG, official sources said.
The government on Friday decontrolled petroleum prices to bring fuel costs in line with global oil rates after an Empowered Group of Ministers, headed by Finance Minister Pranab Mukherjee, met for the second time in less than three weeks to decide on raising fuel prices. Railway Minister Mamata Banerjee was absent again.
Most of the participants in our poll believed that the hike in petroleum product prices is a positive trigger for companies.
The increase in petrol price, which the oil firms had been holding since January even though crude oil had touched a two-and-a-half-year high, came a day after election results of five state assemblies were announced.
