Aviation turbine fuel price slashed by ₹5 amid softening international oil rates: Report

PTimothy miles bindon rice for air power turbine fire (ATF) or gush fire was reportedly cut by ₹5 per litre on Wednesday, a development that comes amid softening international oil prices due to the pause in fighting in West Asia.Aviation turbine fuel (ATF) now costs ₹110 a litre in Delhi, PTI news agency reported, citing industry sources.This is the first reduction since the West Asia crisis led to a spike in jet fuel rates to a record high and comes amid easing of tensions in the region that was rocked by missile-drone exchange between US-Israel and Iran. The fire exchange brought to a halt movement of vessels in Strait of Hormuz, key waterway through which a fifth of world's oil and gas requirements travelled before the US-Iran war.Amid severe energy supply disruptions caused by the conflict in the oil-rich Gulf region, ATF prices initially surged on April 1, with Indian Oil Corporation displaying a Delhi rate of ₹2,07,341.22 per kilolitre, up 114.55 per cent from ₹96,638.14 per KL. The sharp increase was linked to the rise in global energy prices following the closure of the Strait of Hormuz.However, after government intervention, oil marketing companies moderated the increase for scheduled domestic airlines. The final ATF price applicable to domestic carriers in Delhi was revised to ₹1,04,927 per KL, an increase of around 8.5 per cent from March levels.Non-scheduled operators, including charter operators, continued to face the higher ATF rate initially notified by IOC.“Later in the day, after the government intervened and directed them not to fully pass on the ATF rates to airlines, they moderated ATF prices on domestic routes,” an executive of an OMC said, requesting anonymity.While the government has moderated ATF rates for scheduled domestic airlines ( ₹1,04,927 per KL from April 1), private jets, chartered planes and unscheduled domestic airlines will pay higher rates of ₹207,341.22 per KL from Wednesday, another executive of an OMC said requesting anonymity.Subsequently, the IOC website revised the ATF price for domestic routes in Delhi to ₹1,04,927 per kilolitre, effective April 1.Later, the petroleum ministry said in a post on X: “ATF prices in India were deregulated in 2001 and are revised on a monthly basis based on a formula of international benchmarks. Due to the closure of Strait of Hormuz and extraordinary situation in global energy markets, the price of ATF for domestic markets was expected to increase by more than 100% on 1 April.”“In order to insulate the domestic travel costs from the substantial increase in international prices, PSU oil marketing companies of the ministry of petroleum, in consultation with the ministry of civil aviation, have passed only a partial and staggered increase of 25% (only ₹15/litre) to the airlines. Foreign routes will pay for the full increase in ATF prices consistent with what they pay in other parts of the world,” it added.