Aviation turbine fuel (ATF) will cost more starting December, as oil marketing companies have announced another round of price increases, according to information updated on the Indian Oil Corporation Ltd. website. This is the third month in a row that ATF rates have gone up, and the latest hike comes at a time when airlines are already facing high operating costs.
ATF prices raised for third straight month
After the new revision, ATF now costs Rs 99,676.77 per kilolitre in Delhi. In Kolkata, the new price is Rs 1,02,371.02 per kilolitre. In Mumbai, the price is at Rs 93,281.04 per kilolitre. Chennai has the highest rate among the four major metros at Rs 1,03,301.80 per kilolitre. The average increase this month is Rs 5,113.75 per kilolitre. This rise has resulted in additional pressure on airlines, which depend heavily on fuel and already spend a large share of their budget on it.
How prices are decided each month
ATF and cooking gas prices are reviewed and revised on the first day of each month. The revisions are regulated by state-run oil marketing companies such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL).
According to NDTV, these companies revise prices based on average international benchmark rates and the foreign exchange levels. Movements in global crude oil prices and the strength of the Indian rupee against the US dollar also play a key role in the final price.
Recent price trend across months
The December hike comes after earlier increases over the last two months. In November, ATF prices increased by around one percent. Last month, the ATF rate in Delhi rose by Rs 777 per kilolitre, bringing it to Rs 94,543.02 per kilolitre at the time.
Before that, October saw a rise of Rs 3,052.5 per kilolitre, or about 3.3 percent. The only relief in recent months came on September 1, when ATF prices were slashed by 1.4 percent, equal to Rs 1,308.41 per kilolitre.
The repeated hikes are putting pressure on Indian airlines. Fuel already accounts for almost 40% of their total costs, so even a small jump in ATF prices has an immediate impact on their budget. With rates climbing for the third month in a row, airlines are likely to feel the heat especially on routes that require more fuel.