Mumbai, July 6 -- Aviation turbine fuel (ATF) prices were reduced by Rs five per litre on Wednesday, marking the first cut since the West Asia conflict drove rates higher. The move brings the domestic jet fuel rate in Delhi to Rs 110 per litre, industry sources said, offering immediate cost relief for carriers. The reduction follows several weeks of elevated fuel costs that had increased operating burdens for airlines.
International crude oil prices have softened in recent sessions as concerns over supply disruptions eased and market sentiment improved, which led to downward pressure on jet fuel benchmarks. Market sources and pricing formulas used by state-owned oil marketing companies influenced the revision, with changes tied to international benchmark prices and the rupee-dollar exchange rate. Analysts noted that the timing of such adjustments reflects the lagged pass-through of global price movements to domestic pump levels.
Aviation fuel accounts for nearly 35 to 40 per cent of an airline's operating expenses, making movements in ATF prices a central determinant of carrier profitability and fare levels. Domestic refiners and fuel sellers review jet fuel tariffs twice every month, applying the benchmark and currency formula to set retail rates across cities. Operators had faced higher bills in recent weeks after the conflict pushed ATF rates to record highs.
The rollback of Rs five per litre therefore represents the first easing of that squeeze and should reduce short term cash outflows for carriers, while not immediately solving longer term cost volatility. Industry participants will now watch global crude trends and the rupee to assess whether further cuts follow in subsequent revisions. The adjustment is likely to be welcomed by both airlines and passengers who bore the brunt of elevated fuel related costs.
Published by HT Digital Content Services with permission from Construction World.