New Delhi: Aviation turbine fuel commonly known as jet fuel has crossed the Rs 2 lakh per kilolitre mark in the country, in a first, following a sharp rise in crude oil prices triggered by geopolitical crisis in West Asia.
According to industry data, ATF prices saw an unprecedented surge due to disruptions in global energy supply chains and rising benchmark crude prices. The spike is expected to significantly increase operational costs for airlines.
The price rise comes amid volatility in global oil markets after crisis escalated in the Middle East, including disruptions in the Strait of Hormuz, a critical route for global oil transport.
Airlines likely to witness cost burden
The steep increase in jet fuel prices is expected to put financial pressure on airlines dealing with high operational costs and currency fluctuations. Analysts suggest the hike could eventually lead to higher airfares, particularly on international routes where carriers may have to bear the impact of the fuel price rise.
However, the government has indicated that domestic carriers may be partially protected from the full impact of the price surge through staggered price adjustments aimed at preventing increase in fare.
Officials said that while international ATF prices have surged sharply, oil marketing firms have passed on a limited increase to domestic airlines to shield passengers from fare hikes.
ATF prices in the country are revised every month. It linked to international benchmarks following deregulation in 2001.
Experts say that continued volatility in oil prices could impact airline profitability and expansion plans.
