Jet fuel (ATF) prices rise 5%, increasing cost pressure on airlines
Elevated crude, longer routes, and flight cuts tighten capacity and push fares higher
Impact on international travel depends on demand, competition, and airlines’ ability to absorb costs
Foreign Trips May Get Costlier as Jet Fuel Prices Rise 5%
Rising jet fuel costs add pressure on airlines already grappling with high crude prices, tighter capacity, and longer routes
Summary
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The Centre has notified revised export duties on petroleum products for the next fortnight beginning May 1. According to a notification by the Ministry of Finance, the export duty on diesel has been set at ₹23 per litre, while aviation turbine fuel (ATF) will attract ₹33 per litre. There will be no export duty on petrol.
The government also clarified that there is no change in excise duties on petrol and diesel in the domestic market. In early March, the Centre had announced a ₹10 excise duty cut on both fuels amid surging crude prices following the onset of the US–Iran conflict.
Tax Reduction
The latest revision marks a reduction from the previous fortnight. On April 11, diesel exports were taxed at ₹55.5 per litre, while ATF attracted ₹42 per litre.
The Centre reiterated that the export duty mechanism is aimed at ensuring adequate domestic availability of fuels amid heightened geopolitical tensions and supply chain disruptions.
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“LPG, petrol, and diesel are available in sufficient quantities and prices have not increased, so please do not panic,” Economic Times reported Joint Secretary in the Ministry of Petroleum and Natural Gas, Sujata Sharma, as saying.
Speaking at an inter-ministerial briefing on the evolving geopolitical and trade situation, Sharma added that the government currently has no plans to revise domestic fuel prices.
Industry in a Dire Situation
According to an NDTV Profit report, oil marketing companies are currently selling petrol and diesel at losses of ₹14 per litre and ₹18 per litre, respectively, as elevated global crude prices outpace domestic retail rates, squeezing margins.
Petrol is currently priced at ₹94.77 per litre in New Delhi and ₹103.50 per litre in Mumbai. Diesel is retailing at ₹87.67 per litre in the national capital and ₹90.01 per litre in Mumbai.
Meanwhile, soaring crude prices—breaching $125 per barrel on Thursday—have put airline companies in a “dire situation,” as flagged by the Federation of Indian Airlines.
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Air India has already announced cuts to international services to Europe and North America due to rising fuel costs and increased consumption from longer routes.
With crude prices still elevated and geopolitical risks far from easing, the pressure on both fuel retailers and airlines is unlikely to abate anytime soon.