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Pay More For Air Travel As Jet Fuel Price Surges 7.5% For Third Time In A Month

A lot of people are still cautious about travelling unless it’s an emergency situation, but those planning to book a flight in the coming days must keep a watch on the ticket prices as jet fuel or ATF price on Wednesday was hiked by 7.5 per cent, the third increase in a month.

Meanwhile, petrol and diesel rates were unchanged for the second day in a row. This, after diesel rates scaled a new high after prices were hiked 22 times in just over three weeks. In Delhi, a litre of petrol comes for Rs 80.43 per litre, while diesel is priced at Rs 80.53 per litre. However, rates vary from state to state depending on the local sales tax or VAT.

While the diesel price had been hiked on 22 occasions since June 7, petrol price had been raised on 21 occasions, as per report.

What has been the ATF price hike so far?

Aviation turbine fuel (ATF) price was hiked by Rs 2,922.94 per kilolitre (kl), or 7.48 per cent, to Rs 41,992.81 per kl in New Delhi, according to a price notification by state-owned oil marketing companies.

The price has been increased for the third time within a month. For the first time in the month, the rates were hiked by a record 56.6 per cent (Rs 12,126.75 per kl) on June 1 which was followed by a second rise of Rs 5,494.5 per kl (16.3 per cent) on June 16.

The cumulative increase since the oil companies started the cycle on June 7 totals to Rs 9.17 for petrol and Rs 11.14 for diesel. Aviation turbine fuel (ATF) or jet fuel prices were hiked on Wednesday, marking the third increase in a row within one month.

How will it impact your travel expenditure?

Typically, ATF accounts for nearly 35-50 per cent of the total cost of running an airline in India, as per the business daily Mint analysis. In case of the continuous rise in jet fuel price, it can prove detrimental to the balance sheets of airlines which are trying hard to sustain.

The rise in ATF prices significantly impacts the cost of operations for any airline because fuel remains one of the most significant components of the cost. Even as the airlines try to ensure a leaner cost structure by keeping a check on the non-customer-facing expenses but such a steep hike may make it difficult for them to add more flights and routes. It is because the steep hike will make it difficult for airlines to cover their variable costs, especially during the Covid-19 pandemic that has already hit the airlines. In such a situation, airlines may not have an alternate solution than to pass on the rise with an increase in the fare.

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