NEW DELHI: In a noteworthy development on Friday, the price of aviation turbine fuel (ATF) witnessed a 4.6% reduction, marking the second price cut within a month. The decrease amounted to Rs 5,189.25 in the national capital, bringing the ATF price down to Rs 1,06,155.67 per kiloliter from Rs 1,11,344.92. This move follows a nearly 6% reduction (Rs 6,854.25 per kiloliter) on November 1. The cumulative impact of these two cuts has effectively offset almost a third of the substantial Rs 29,391.08 per kiloliter increase implemented in four monthly tranches starting July 1.
This reduction in jet fuel prices, a significant component constituting 40% of an airline's operating costs, offers a welcome respite to financially strained airlines. The consecutive cuts alleviate some of the burden imposed by previous increases.
Conversely, commercial cooking gas (LPG) rates experienced an upward revision, climbing by Rs 21 per 19-kilogram cylinder in line with international benchmarks. Despite this hike, the price of domestic LPG, commonly used in household kitchens, remained unchanged at Rs 903 per 14.2-kilogram cylinder.
Oil firms implemented the increase in the price of commercial LPG, utilized by establishments like hotels and restaurants. The 19-kilogram commercial LPG cylinder now costs Rs 1,796.50 in the national capital and Rs 1,749 in Mumbai. This hike follows a notable Rs 77.5 per cylinder reduction in rates on November 16.
The adjustment in commercial LPG prices aligns with changes in the Saudi contract price (CP), the benchmark for LPG pricing. This increase is attributed to the upward trend in crude oil prices witnessed in recent weeks, coupled with concerns about oversupply.
State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) routinely revise cooking gas and ATF prices on the 1st of every month based on the average international prices from the preceding month. Notably, the revision on November 16 deviated from this schedule.
However, petrol and diesel prices have remained unchanged for a record 21st consecutive month. Petrol is priced at Rs 96.72 per litre in the national capital, while diesel is available at Rs 89.62 per litre. Despite the standard practice of daily revisions based on a 15-day rolling average of benchmark international fuel prices, state-owned fuel retailers have refrained from making adjustments since April 6, 2022. The last modification occurred on May 22 when the government reduced excise duty to provide relief to consumers amidst rising international oil prices.