The government, last week, hiked import duty on aviation turbine fuel to 5 per cent.
Mumbai: Air passengers are expected to witness an increase in the flight ticket prices this festive season, as the aviation turbine fuel (ATF) prices have on Monday surged to the highest level since March 2014, as per the data from Indian Oil Corporation Ltd.
Jet fuel prices as on October 1, 2018 surged to Rs 74,567 per kilolitre in Delhi, Rs 79,736 per kilolitre in Kolkata, Rs 74,177 per kilolitre in Mumbai and Rs 75,521 per kilolitre in Chennai. Jet fuel prices has been the highest in Kolkata and lowest in Mumbai. The main reasons behind the surge in fuel prices is the increase in crude oil prices in the international market and falling rupee against US dollar.
The jet fuel prices in September was Rs 69,461 per kilolitre in Delhi, Rs 74,677 per kilolitre in Kolkata, Rs 69,161 per kilolitre in Mumbai and Rs 70,316 per kilolitre in Chennai. The jet fuel prices as on January 1, 2014 was Rs 76241 per kilolitre in Delhi, Rs 86559 per kilolitre in Kolkata, Rs 78783 per kilolitre in Mumbai and Rs 82853 per kilolitre in Chennai.
The government, last week, hiked import duty on aviation turbine fuel to 5 per cent, but the import duty hike is expected to have a marginal effect on airlines cost as the amount of jet fuel imported by the airlines accounts to only 4 per cent of its total requirement.
Owing to the stiff competition in domestic aviation sector, airlines are propelled to keep the rates intact even on increasing jet fuel prices and falling rupee. But, now the airlines, which are facing huge losses, are expected to pass on the burden of increasing jet fuel prices to consumers. The domestic airlines are under tremendous pressure to curb expenses as the earning has gone down drastically.
The airlines hope that fares would increase in the month of October, citing festive season ahead and a surge in demand.