Jet fuel prices soared to fresh highs on Wednesday — breaching the Rs 2 lakh per lakh per kilolitre mark for the first time amid the Iran war. The update came even as the Indian government raised commercial LPG rates by Rs 195.50 per cylinder, mirroring the surge in global oil prices. Oil companies have opted for a calibrated approach and passed only a partial and staggered increase of 25% (Rs 15 per litre) to airlines.

“With ATF prices in India–deregulated since 2001 and revised monthly based on international benchmarks, facing extraordinary pressure due to global energy disruptions and the closure of the Strait of Hormuz, a steep increase of over 100% was anticipated from 1 April. The decision by PSU Oil Marketing Companies to implement only a partial and staggered increase of 25% (Rs 15/litre) for domestic airlines is both pragmatic and forward-looking, while ensuring that foreign routes bear the full market-aligned price,” Civil Aviation Minister Ram Mohan Naidu Kinjarapu wrote on X.

Jet fuel prices were deregulated more than two decades ago and rates are typically aligned with benchmark international prices as per a written understanding with the airlines. But the ongoing surge in global energy prices has triggered the sharpest increase in ATF prices to date. Foreign airlines and other carriers will pay market rates. Fuel makes up for around 40% of an airline’s operating cost.

ATF spikes over 100% amid war

Aviation Turbine Fuel prices have been revised from April 1 in major metro cities and there is growing concern about a fresh spike in flight prices.

In Delhi, ATF is now priced at Rs 2,07,341.22 per kilolitre, while in Kolkata it stands at Rs 2,05,953.33 per kilolitre. Mumbai has recorded ATF prices at Rs 1,94,968.67 per kilolitre, and Chennai at Rs 2,14,597.66 per kilolitre. The increase is in line with rising global crude oil prices currently are impacting airline operations and overall air travel costs.

ATF prices for domestic airlines operating international routes have also seen a sharp increase. These stood at $816 per kilolitre earlier but have now surged to $1,690 per kilolitre following the April 1 revision, more than doubling in response to global price trends.

Flight prices to rise?

The rising cost of fuel forced most Indian airlines to introduce a surcharge last month — ranging from Rs 199 to Rs 18,000 depending on the route. The government also removed a fare cap of Rs 18,000 for domestic flights on March 21. The temporary measure had been introduced in December 2025 to stop airlines from overcharging passengers amid a massive wave of flight cancellations by IndiGo.

Longer routes with more expensive fuel

Airspace closures over many Middle Eastern nations have forced planes into longer, less efficient routes that require additional fuel and flight crew. Indian airlines also contend with a long-standing closure of Pakistani airspace that is now forcing them to take a massive ‘u-turn for destinations in Europe and North America. Longer flights also require additional catering and higher aircraft maintenance.