State-run oil marketing companies have hiked the prices of jet fuel and commercial LPG cylinders amid soaring crude oil prices owing to the ongoing Russia-Ukraine war.

Aviation turbine fuel (ATF) prices have been hiked by 3.3% to a record high of ₹93,530.66 per kilolitre in Delhi, according to a notification by government-owned oil retailers on Tuesday.

Jet fuel price in Mumbai jumped to ₹91,998.08 per kl from ₹88,987.20 earlier. In Kolkata, it stood at ₹97,899.58 per kl compared with ₹94,888.70 per kl in February.

This is the fifth hike in jet fuel prices this year. Last month, aviation fuel prices were raised by 8.5% on the day of the Union Budget 2022-23 and then again on February 17 by 5.2%.

Following the latest price revision, jet fuel prices have skyrocketed to an all-time high.

This comes at a time when Brent crude, the international benchmark, has been trading over $100 a barrel after Russia began its military offensive against Ukraine.

The price of commercial liquefied petroleum gas (LPG) or cooking gas was also hiked by ₹105 per 19 kilogram cylinder in Delhi with effect from March 1. In Kolkata, commercial LPG cylinders will now cost ₹2,095 instead of ₹1,987. In Mumbai, the price has been raised from ₹1,857 to ₹1,963.

While the price of Brent crude jumped over $100 a barrel as Russia began its invasion in Ukraine, state-run oil marketing companies have yet to increase petrol and diesel prices amid polls in states like Uttar Pradesh.

The government had cut excise duty on petroleum products in November 2021 to prevent the prices of petrol and diesel from rising. The informal freeze on fuel prices is expected to continue till the last ballot is cast on March 7.

Fuel prices are changed twice every month based on the average price of the international benchmark in the preceding fortnight.

High crude oil prices can cost the government around ₹1 lakh crore in the next financial year if the Centre continues to levy the reduced excise duty on petrol and diesel, according to a report by SBI Research.

Fortune India earlier reported that rising crude prices are expected to severely impact India's foreign exchange outgo, fiscal deficit and inflation numbers as the country imports around 85% of its annual oil requirement.

Indian refiners like Reliance Industries (RIL), Indian Oil Corporation, Hindustan Petroleum Corp and Bharat Petroleum Corp will have to cough up more to buy the expensive crude. They also will have to try hard to ensure their margins amid fluctuations in prices. The high price scenario will help exploration and production companies like ONGC and Cairn India to bulk up their bottom line.

According to Japanese research firm Nomura, India will be among the worst hit countries in Asia if the ongoing Russia-Ukraine conflict leads to sustained increase in oil and food prices. The latest Asia Insights report of Nomura says the adverse impact will be manifested through higher inflation, weaker current account and fiscal balances, and a squeeze on economic growth.

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