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OMCs hike ATF prices by Rs 2,845 per KL, or 3.8%

01 Nov 2011 Evaluate

The government owned oil marketing companies (OMCs) on October 31, increased the price of aviation turbine fuel (ATF), or jet fuel by 3.8%. After the hike, the fuel prices in Delhi surged by Rs 2,845 per kilolitre (KL) or 3.8% to Rs 61,115 per KL. The price rise comes on the back of three consecutive massive hikes since February this year, when crude oil spiked to over $100 per barrel and further a marginally 0.5% cut in rates to Rs 58,271 per KL effected from October 16.

The recent hike is the 11th direct increase in jet fuel prices since October 2010, when international crude oil prices started soaring. However, the OMCs on October 1 and September 16 had raised jet fuel prices by 2.5% and 1.5% respectively, mainly because of costlier imports due to recent depreciation in rupee against US dollar.

After the hike, the fuel prices in Mumbai, home to India’s busiest airport, increased by Rs 2,950 per KL to Rs 61,984 per KL compared to the old price of Rs 59,021 per KL.  

The ATF accounts for around 40% of the airlines’ operating cost and prices vary from airport to airport depending on the local sales tax or VAT. The sharp increase in the prices will increase the burden on the airlines, which are already in bad financial condition.

All the three government owned OMCs i.e. Indian Oil Corp (IOC), Hindustan Petroleum and Bharat Petroleum revise jet fuel prices on 1st and 16th of every month based on the average international price in the preceding fortnight.

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