Oil companies hike jet fuel prices by 5%, commercial LPG prices by over ₹200

New Delhi: Prices of flight tickets may rise further as oil marketing companies (OMCs) have raised the prices of aviation turbine fuel by around 5% across the four metro cities.

In the national capital, jet fuel now costs ₹1,18,199.17 per kilolitre (kl), up 5.14% from ₹1,12,419.33 last month. Similarly, the price of jet fuel in Kolkata increased 4.65% to ₹1,26,697.08 per kl. In Mumbai and Chennai, jet fuel is now priced at ₹1,10,592.31 and ₹1,22,423.92 per kl, respectively, according to data from the OMCs.

This increase in ATF prices may make airline tickets more expensive amid the festive season, during which domestic travel picks up. ATF price comprises around 40% of the ticket price. This is the fourth consecutive increase in jet fuel prices.

An S&P Global Commodity Insights report in August said that air travel, as measured by number of flights, returned to pre-pandemic levels in India but jet fuel demand is still expected to remain below 2019 levels in 2023 due to a slower rebound in long-haul travel and a distressed airline industry.

Additionally, OMCs have increased the price of commercial LPG cylinders by over ₹200 across the country, which will increase expenses for hotels and restaurants. In the national capital, a 19-kg commercial LPG cylinder is sold for ₹1,731.50, up ₹209 from the price last month. Similarly, after the price hike, commercial cooking gas cylinders in Kolkata, Mumbai and Chennai will cost ₹1,839.50, ₹1,684, and ₹1,898 per cylinder.

These developments come amid persistently high inflation. Although the retail inflation eased in August, it was still above the Reserve Bank of India’s (RBI’s) upper limit of 6%. India’s retail inflation eased to 6.83% in August from 7.44% in July as vegetable prices cooled somewhat, according to data from the National Statistical Office (NSO). Prices of 14.2 kg domestic cooking gas cylinders, however, remained unchanged.

In August the union cabinet approved slashing LPG prices by ₹200 a cylinder. The reduction also applies to beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) so this translates to a total subsidy of ₹400 per 14.2-kg LPG cylinder.