ATF Prices Double; Domestic Airlines Face Only 8.5 Pc Increase

ATF or jet fuel prices more than doubled to a record ₹2.07 lakh per kilolitre on Wednesday, but state-owned oil companies passed on only a fraction of the increase to domestic airlines, adopting a calibrated approach to dealing with the war-linked surge in global oil prices.

Aviation turbine fuel (ATF) price was increased by 8.5 per to ₹104,927.18 per kl for domestic airlines, according to state-owned oil firms.

ATF price for domestic airlines in Delhi was hiked by ₹8,289.04 per kilolitre, or 8.56%, to ₹104,927.18 per kl, according to state-owned oil firms. The rate compares to ₹96,638.14 per kl last month.

Domestic airlines will pay half of what foreign airlines, as well as other carriers such as non-scheduled, ad hoc, and charter, would pay. For them, the prices have gone up by ₹110,703.08 per kl, or 114.5%, to ₹207,341.22 per kl.

Alongside, rates of commercial LPG - the other petroleum apart from ATF whose pricing is deregulated - were increased by ₹195.50 per 19-kg cylinder.

Price of select premium or branded petrol and diesel - which make up for 2-5% of all auto fuels sold in the country - too was increased by ₹1.50 a litre to ₹92.99 for 'Extra Green' diesel and by ₹11 to ₹160 a litre for 100 octane petrol (XP100).

Prices of normal or unbranded petrol and diesel remain unchanged, and so do the rates of domestic cooking gas LPG.

Explaining the rationale for the jet fuel price hike, the Ministry of Petroleum and Natural Gas, in a post on X, said ATF prices in India were deregulated in 2001 and are revised on a monthly basis based on a formula of international benchmarks.

"Due to the closure of Strait of Hormuz and extraordinary situation in global energy markets, the price of ATF for domestic markets was expected to increase by more than 100% on April 1," it said. "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 the Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% (only ₹15 per 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." Civil Aviation Minister Rammohan Naidu Kinjarapu termed the partial and staggered increase in ATF price for domestic airlines as "pragmatic and forward-looking, while ensuring that foreign routes bear the full market-aligned price." "This calibrated approach will help shield passengers from sharp fare increases, ease the burden on domestic airlines, and support the continued stability of the aviation sector at this crucial juncture. It will also benefit the broader economy by ensuring the smooth movement of cargo and maintaining vital air connectivity for trade and logistics," he added.

The increase for domestic airlines came to only 8.56% or ₹8.3 per litre (₹8,289.04 per kl equals to about ₹8.3 per litre). While the ministry did not elaborate on its calculations, the quantum indicated - 25% or ₹15 per litre - may be the total increase that the oil companies may have decided to pass on to domestic airlines over a certain period of time.

Pricing of ATF was deregulated in 2001, and since then, the rates have been aligned with benchmark international prices, as per a written understanding with the airlines.

But since the Middle East war-induced surge in global energy prices warranted the steepest increase ever to be made in the ATF prices, the government and state-owned oil companies decided to adopt a calibrated approach, industry sources said.

While foreign airlines and other carriers would pay market rates, prices for domestic airlines have been moderated, they said.

This is the first time ever that the ATF price has crossed the ₹2 lakh per kl mark. The previous peak was in 2022 when rates were hiked to ₹1.1 lakh per kl as oil prices surged after Russia invaded Ukraine.

Wednesday's hike is the second straight monthly increase in rates. Prices on March 1 were hiked by 5.7% (₹5,244.75 per kl).

The rising prices will further strain airlines, which are already burning more fuel in taking longer routes for flying to Western destinations because of airspace closuers due to the war. Fuel makes up for around 40% of an airline's operating cost.

Alongside, rates of commercial LPG - one that is used by hotels and restaurants - were hiked by ₹195.50 per 19-kg cylinder. A 19-kg commercial LPG now costs ₹2,078.50 in Delhi.

Rates were last increased by ₹114.5 per 19-kg cylinder on March 1.

Domestic cooking gas LPG rates, which were last hiked by ₹60 per 14.2-kg cylinder on March 7, remain unchanged. It costs ₹913 per 14.2-kg cylinder in Delhi.

State-owned Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum revise ATF and LPG prices on the first day of every month based on international benchmarks and the exchange rate.

Petrol and diesel prices continue to remain frozen after a ₹2 per-litre reduction in March last year; petrol currently costs ₹94.72 per litre in Delhi and diesel ₹87.62.

On LPG prices, the ministry said that prices of commercial LPG cylinders, used by industries and hotels, are deregulated, market-determined and revised normally on a monthly basis. Their consumption is less than 10% of the total LPG consumed in the country.

"April 1 price increase in commercial cylinder price is due to a 44% surge in the Saudi Contract Price: from $542 per tonne in March to $780 per tonne for April, as 20-30% of global LPG supplies are stuck in Strait of Hormuz (due to the war in Middle East)," it said.

The oil marketing companies are incurring under recovery of ₹380 cylinder in keeping domestic LPG rates unchanged, it said. "Cumulative losses by end-May will reach approximately ₹40,484 crore. Last year also, out of total losses of ₹60,000 crore, ₹30,000 crore were absorbed by oil PSUs and ₹30,000 crore by Government of India, in order to insulate the Indian citizens from high international LPG prices." India's domestic LPG price remains one of the lowest in the world as compared to Pakistan: ₹1,046. Sri Lanka: ₹1,242. Nepal: ₹1,208, it added.

On the increase in price of premium petrol and diesel, it said, "Regular petrol and diesel prices - the fuel that India runs on - are unchanged, i.e. at ₹94.77 per litre and ₹87.67 per litre in Delhi." "With global petroleum prices up by up to 100% in the last 1 month, PSU OMCs are incurring under-recoveries of ₹24.40 per litre on petrol and ₹104.99 a litre on diesel at RSP level as on 01.04.2026," it said. "The recent ₹2/litre revision applies only to premium petrol variants - XP95, Power95, Speed - high-octane performance products, whose prices are revised on fortnightly basis and whose sales by volume are 2% and 5% of total volume. They are purchased by motorists, at a premium, by choice." Every pump in India continues to offer regular petrol and diesel at unchanged prices, even as prices in countries all over the world have risen by 30-50%, it added.