1 day ago
Jet Fuel Prices Rise 5.46% as Iran Tensions Intensify
Aircraft need a special fuel called aviation turbine fuel, or ATF, to fly.
In India, this fuel became 5.46% more expensive for domestic airlines.
The price rose from Rs 115 to Rs 121.28 per litre.
Fuel is one of airlines’ biggest costs, so running flights may become more expensive.
Airlines could pass some of those costs on to passengers through higher ticket prices.
However, tickets do not automatically become more expensive because airlines also consider demand, competition and empty seats.
Global oil prices rose amid tensions between the United States and Iran.
Some airlines can avoid short-term price changes by joining a scheme that fixes their fuel price for up to three years.
Aviation turbine fuel prices for Indian domestic airlines rose by Rs 6.28 per litre, or 5.46%, to Rs 121.28.
The increase is the second consecutive monthly hike, following a roughly Rs 5 increase on August 1.
Fuel typically represents 35% to 40% of Indian airlines’ operating expenses, potentially raising their costs.
Airfares may increase, but ticket prices also depend on demand, competition and available seats.
Airlines using the voluntary price-stabilisation scheme can lock in ATF at Rs 115 per litre for up to three years.
- Who
- Indian domestic airlines and their passengers are affected; Indian Oil Corporation sources were cited for the pricing information.
- What
- Aviation turbine fuel prices increased by Rs 6.28 per litre, or 5.46%, to Rs 121.28 per litre.
- Where
- The price change applies to aviation turbine fuel used by domestic airlines in India.
- When
- The latest increase followed a similar hike on August 1 and marked the second consecutive monthly increase.
- Why
- Global crude oil prices rose amid heightened United States-Iran tensions and concerns about energy supplies through the Strait of Hormuz.
Key facts
- New ATF price
- Rs 121.28 per litre
- Increase
- Rs 6.28 per litre, or 5.46%
- Previous ATF price
- Rs 115 per litre
- Airline cost share
- ATF generally accounts for 35% to 40% of Indian airlines’ operating expenses
- Price-stabilisation rate
- Participating airlines can lock in ATF at Rs 115 per litre
- Lock-in period
- Up to three years
- Market indicators
- WTI traded above $86 a barrel, while Brent crude settled near $90 a barrel
Sources
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