Jet fuel (ATF) prices have been hiked by a steep 6.9%, taking the rates to lifetime high of R75,031 per kilolitre.
ATF had last scaled the high of R71,028.26 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%, 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 R3,617.84 per kl or 5.8% on July and by another R4,169.4 per kl, or 6.3%, on August 1. Prior to these, rates had climbed to R62,416.16 per kl on June 1 from R62,649.95 previously.
These hikes follow two steep reduction in rates — by 5.5% (R3884.98 per kl) on April 1 and 5.3% or R3,545.94 per kl from May 1.
ATF price in March had touched R70,080.87 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 R77,632.43 per kl from Sunday as against R72,477.50 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.
The European Union in July said it will levy a 4.7 % duty on jet fuel imports from India in addition to cargoes from West Asia, its two top suppliers, an EU official said, increasing risks of price rises for European airlines.
The European Union said last month it would impose the duty on imports from Gulf Cooperation Council (GCC) states starting January 1, 2014 after removing the group from the generalised scheme of preferences (GSP), which offers trade advantages to developing economies.
India has not been removed from the GSP, but the EU will remove the waiver because its oil products have become competitive in global markets. “Once a country becomes competitive as an exporter of a particular category of products, the tariff preference is not essential any more,” the EU official said on Thursday.