Jet fuel prices hiked by 7.6 per cent

Flying in India could become dearer as the three state-owned oil marketing companies have once again jacked up the price of aviation turbine fuel (ATF). Jet fuel is now at its record peak of Rs72,282 per kl in Delhi.

The three firms decided to raise the price for ATF by 7.6 per cent, the biggest-ever increase in recent months. The refiners justified the hike because of an increase in international oil prices and a weakening rupee.

Jet fuel prices had peaked at Rs71,000 a kl in August 2008 after international oil prices shot up to $147 a barrel. But with a sharp decline in oil prices, ATF prices in India also fell, dipping to an eight-month low of Rs61,000 in July.

But since then jet fuel prices have galloped on the back of a surge in international oil prices. The latest price hike is the fourth straight increase since July.

ATF prices, which add up to nearly 40 per cent of the operating costs of airlines, are the highest in India. The country's loss-making airlines brought pressure on the government, allowing them to import ATF directly. Jet fuel is cheaper by nearly 50 per cent abroad, especially in near-by cities including Dubai, Singapore and Bangkok.

A significant part of the price difference is because of the stiff sales tax imposed by governments; these range from three to 30 per cent. Most of the leading airlines, including IndiGo, SpiceJet, Air India, Go Airlines and Air India, have got permission to import ATF.