Jet fuel prices hit a record high on Friday, a move that will hit the airline’s finances despite a strong recovery in air passenger traffic in March. Also on Friday, Oil Marketing Companies (OMCs) increased the price of 19 kg commercial LPG cylinder by approx. 250 with immediate effect. Brent crude traded up 65% year-on-year at $105 on Friday, as global energy prices rose amid the Ukraine crisis and supply concerns.
On Friday, the increase in Aviation Turbine Fuel (ATF) was the seventh in 2022. In New Delhi, ATF price has risen by a record 20.74% as compared to a month ago. 1,12,924.83 per kiloliter. Prices hiked in Kolkata, Mumbai and Chennai 1,17,353.71, 1,11,690.61 more 116,583.71 per kiloliter respectively.
Jet fuel prices are revised every fortnight and vary from state to state due to different value-added taxes. Jet fuel makes up 30-40% of the cost of running an airline in India and the price hike will reduce the profit margins of airlines that have reported huge losses in the past few quarters as a result of the pandemic. Airlines are pressurizing the government to bring jet fuel under the Goods and Services Tax (GST) as it will give the airlines the benefit of input tax credit. “Higher taxes on jet fuel will need to be revisited,” a senior airline official said. , requesting anonymity.
It may be difficult for airlines to pass on the full cost hike to passengers without impacting demand, the official said, adding that the positive is that the market hasn’t crashed despite higher airfares so far.
However, with the decline in active cases of COVID, domestic traffic has been witnessing an increase in recent weeks.
According to data compiled by aviation website NetworkThoughts, domestic flights carried 10.26 million passengers during March, an increase of 34.31% compared to February. The total flights deployed by airlines during March were 37.39% higher than in February.
Talking about the increase in the prices of commercial LPG cylinders, now the price of 19 kg commercial cylinder has increased. Against the previous level of 2,253 in Delhi 2,003.50. In Mumbai, the price was hiked from 2,205 1,954.50 per cylinder.
Besides this, Indraprastha Gas Limited on Friday increased the prices of compressed natural gas in Delhi by 80 paise. 60.81 per kg and a huge increase in the prices of piped LPG 5 per cubic meter.
download
The app will get 14 days of unlimited access to Mint Premium absolutely free!