The price of aviation turbine fuel (ATF), or jet fuel, more than doubled to a record ₹2.07 lakh per kilolitre on Wednesday, tracking the sharp surge in global oil prices last month. However, domestic airlines will face a limited increase of about 8.5%, as the government opted for a calibrated pricing approach. 

Non-scheduled operators, charter services, and foreign carriers will bear the full brunt of the hike, with ATF prices for them rising by ₹1,10,703.08 per kl, or 114.5%, to ₹2,07,341.22 per kl. Domestic carriers, in contrast, will pay roughly half that rate. 

Jet fuel prices have been deregulated for over two decades and are revised monthly in line with international benchmarks under an industry understanding. However, the ongoing conflict in West Asia, which has disrupted global energy supply chains, prompted authorities to soften the impact on domestic aviation. 

Industry sources said the government, along with state-run oil marketing companies, adopted a staggered increase to prevent a sharp spike in airfares. Foreign airlines will continue to pay market-linked rates, while domestic carriers have been partially insulated. 

The surge comes as global crude prices have risen nearly 50% due to intensifying conflict in West Asia and disruptions such as the closure of the Strait of Hormuz. This marks the first time ATF prices have crossed the ₹2 lakh per kl mark. The previous peak was in 2022, when prices rose to around ₹1.1 lakh per kl following the Russian invasion of Ukraine. 

This is also the second consecutive monthly increase, after a 5.7% hike on March 1. 

Higher fuel costs are expected to further strain airlines, which are already incurring higher expenses due to longer flight routes caused by airspace closures linked to the conflict. Fuel typically accounts for around 40% of an airline’s operating costs. 

Prices of commercial LPG hiked

In a related move, prices of commercial LPG, used by hotels and restaurants, were raised by ₹195.50 per 19-kg cylinder. In Delhi, a commercial cylinder now costs ₹2,078.50. This follows a previous hike of ₹114.5 on March 1. 

Domestic gas prices remain unchanged 

Domestic cooking gas prices remain unchanged at ₹913 per 14.2-kg cylinder in Delhi, after the last revision on March 7. 

State-owned oil companies such as Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum revise ATF and LPG prices on the first of every month based on global benchmarks and exchange rates. 

Meanwhile, petrol and diesel prices remain unchanged following a ₹2 per litre cut last year. In Delhi, petrol is priced at ₹94.72 per litre and diesel at ₹87.62 per litre. 

Civil Aviation Minister K. Rammohan Naidu said the staggered increase in jet fuel prices would help shield passengers from steep fare hikes. He said that public sector oil companies, in consultation with the government, had implemented only a partial increase of about 25% (₹15 per litre) for domestic airlines, while international operations would bear the full market-linked cost. 

The Ministry of Petroleum and Natural Gas said ATF prices, deregulated since 2001, are revised monthly based on international benchmarks.

In its X handle, the ministry wrote, “ATF prices in India were deregulated in 2001 and are revised on monthly basis based on a formula of international benchmarks. Due to the closure of Strait of Hormuz and extraordinary situation in global energy markets, price of ATF for domestic markets was expected to increase by more than 100% on 1 April. In order to insulate the domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies of the Ministry of Petroleum, in consultation with Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% (only ₹15/litre) to the airlines. Foreign routes will pay for the full increase in ATF prices consistent with what they pay in other parts of the world.”