Jet fuel peaks to Rs 1.41 lakh per kl in Delhi; SpiceJet seeks govt intervention

State-backed oil marketing companies (OMCs) have announced a hike in the aviation turbine fuel prices with effect from June 16 (Thursday). After this hike, jet fuel prices have reached an all-time high. For domestic airlines, ATF cost Rs 1,41,232.87 per kl in Delhi; Rs 1,46,322.23 per kl in Kolkata; Rs 1,40,092.74 per kl in Mumbai; and Rs 1,46,215.85 per kl in Chennai.

In case of domestic airlines on international run, ATF cost $1,372.71 per kl in Delhi; $1,412.25 per kl in Kolkata; $1,369.12 per kl in Mumbai; $1,367.56 per kl in Chennai.

Jet fuel prices were last revised on June 1. After this revision, ATF prices for domestic airlines went down to Rs 1,21,475.74 per kl in Delhi; Rs 1,20,306.99 per kl in Mumbai; Rs 1,26,360.98 per kl in Kolkata and Rs 1,25,725.36 per kl in Chennai.

Reacting to the hike, SpiceJet CMD Ajay Singh said that aviation turbine fuel prices have gone up by more than 120 per cent since June 2021, while adding this increase in ATF is sustainable for airlines and central and state governments need to take action to reduce taxes. 

“We have in the last few months tried to absorb as much burden of this fuel price rise, which constitutes more than 50% of our operational cost, as we could. The weakening of the Indian rupee against the US dollar further significantly impacts airlines as our substantial cost is either dollar denominated or pegged to the dollar," Singh said.

He also said that domestic airlines are scrambling in the face of sharp rise in jet fuel prices and depreciation of rupee. He said that airline fares will have to be increased by 10 per cent to 15 per cent sustain cost of operations.

ATF rates are revised on the first and 16th of every month on the basis of equivalent rates in the international market and local taxes.

Jet fuel makes up 40 per cent of the running cost of an airline. ATF prices were revised every fortnight since the beginning of 2022 due to the surge in fuel prices triggered by the Russia-Ukraine war and COVID-19 pandemic. India is 85 per cent dependent on imports to meet its energy requirements.

Global oil prices

Oil prices slid more than $3 on Wednesday after the US Federal Reserve hiked interest rate by 75 basis points. Brent crude settled down 2.2 per cent at $118.51 per barrel, having fallen as low as $117.75 per barrel, whereas US West Texas Intermediate crude fell 3.04 per cent to $115.31 per barrel, after dropping to $114.60 per barrel, Reuters reported.