PremiumNEW DELHI : The price of aviation turbine fuel (ATF), or jet fuel, were once again hiked on Sunday with oil marketing companies (OMCs) increasing ATF prices by about 1.28% over the past month and by more than 57.37% on an annual basis, as global crude oil prices firmed up on improved demand.
On Sunday, the ATF price in New Delhi was ₹69,136.47 per kilolitre, according to a notification by Indian Oil Corp. Ltd (IOC). The ATF price in Mumbai was ₹67,384.77, while in Chennai it was at ₹71,068.76 and in Kolkata it was at ₹73,191.48 per kilolitre.
In comparison, on 1 July, the ATF price in New Delhi, Mumbai, Chennai and Kolkata stood at ₹68,262, ₹66,482.90, ₹70,011.44 and ₹72,295.24 per kilolitre, respectively. ATF prices differ across cities because of the taxes levied by states and are updated every fortnight.
Global crude prices have risen to about $74 a barrel from $41 a barrel during a year ago. The rise in ATF prices will hurt carriers, with jet fuel accounting for about a fourth of expenses for major airlines.
Rising ATF) prices will likely offset the recovery for Indian airlines as passenger demand slowly improves amid the ongoing covid-19 pandemic.
Rating agency Icra Ltd in its 6 July report on aviation said that rising ATF prices remain a near-term challenge for airlines. “While until February, ATF prices were lower on a year-on-year (y-o-y) basis, in March, April, May and June, prices were higher by 3.0%, 59.8%, 103.4% and 86.3%, respectively, on a y-o-y basis. In July, the prices have been higher by 59.7% on a y-o-y basis, attributed to the low base of July 2020 when prices declined y-o-y by 31.1% because of the impact of the pandemic," it said.
Rising ATF prices is an added challenge for airlines during the pandemic, a senior official of a no-frills carrier said on the condition of anonymity.
“The government government must put jet fuel under the goods and services tax (GST) regime as early as possible. Failing to do so could lead to many airlines piling up losses and struggling to survive," the official said further.
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