Aviation turbine fuel (ATF), or jet fuel, prices have crossed the Rs 2 lakh mark for the first time in India, as rising crude oil prices linked to the global energy markets. The sharp increase comes as airlines face growing cost pressure amid volatile fuel prices and a weakening rupee.
According to official data, ATF prices in New Delhi have been raised to Rs 2,07,341.22 per kilolitre (kl), up from Rs 96,638.14 per kl earlier. This marks an increase of more than 114%, making it the highest level ever recorded.
The surge in jet fuel prices is largely due to a sharp rise in global crude oil rates as tensions involving Iran, the United States and Israel continue to disrupt supply chains and increase uncertainty in energy markets.
As of 8:20 am, global crude oil prices were trading higher. WTI crude was at $102.79 per barrel, up by 1.39%, while Brent crude stood at $105.48 per barrel, also up 1.39%.
The steady rise in crude oil prices has directly impacted aviation fuel costs, as ATF prices are closely linked to global benchmarks.
Data from the International Air Transport Association shows that global ATF prices have nearly doubled within a month. Prices rose from $99.40 per barrel on February 27 to $195.19 per barrel by March 27.
This sharp increase has pushed up fuel costs for airlines across markets. In India, fuel prices for domestic flights have risen by around 115%, while those for international operations have increased by more than 100%.
In Delhi, ATF for international flights is now priced at around $1,690 per kl, crossing the $1,000 mark for the first time. Kolkata has recorded even higher rates at about $1,727 per kl.
The sharp rise in fuel prices is adding to the financial burden on airlines. ATF is one of the largest cost components for carriers, and such a steep increase is likely to impact ticket prices and overall operations.
Airlines such as surcharges, and further revisions may follow if prices remain elevated.
The situation is also being affected by the weakening rupee, which has hit record lows. Since aviation fuel is priced in dollars, a weaker rupee increases the overall cost for airlines, especially for international operations.
Apart from fuel price increases, airlines are also dealing with operational challenges due to the ongoing conflict. Airspace restrictions in parts of West Asia have forced airlines to take longer routes, which increases fuel consumption and adds to costs.
These factors together are putting pressure on airline profitability and could lead to higher fares for passengers in the coming weeks.
Amid rising costs, Civil Aviation Minister Ram Mohan Naidu has reportedly urged state governments to reduce Value Added Tax (VAT) on jet fuel to ease the burden on airlines and passengers.
According to reports, the minister has reached out to chief ministers, seeking immediate tax relief. Discussions are ongoing, and a decision may depend on whether states agree to reduce VAT rates.
Currently, major aviation hubs such as Delhi, Maharashtra and Tamil Nadu impose VAT rates ranging from 18% to 29% on ATF, which adds significantly to fuel costs.
With jet fuel prices at record highs and global crude oil markets remaining volatile, the aviation sector is likely to remain under pressure in the near term. The situation will depend on how geopolitical tensions evolve and whether crude oil prices stabilise in the coming weeks.