India hikes ATF prices by 115% for non-scheduled carriers, charters amid West Asia crisis; govt eyes relief

The Indian government has increased the price of aviation turbine fuel (ATF) by over 115% for non-scheduled carriers and charters amid the ongoing West Asia war.

Initially ATF rate list on IndianOil website didn't clearly mention if the hike was for domestic airlines. In a clarification IOC said new prices were for non-scheduled carriers and charters and for scheduled carriers prices would be announced later.

In Delhi, the ATF will cost

₹2,07,341.22 lakh per kL from April 1 for non-scheduled carriers and charters, as compared to ₹96,638 per kL in the previous month. 

In Kolkata, the ATF price for non-scheduled carriers and charters now stands at ₹2,05,955.33, up from ₹99,587.14 in March. 

In Chennai, the ATF for non-scheduled carriers and charters now costs ₹2,14,597.66, witnessing an increase from ₹1,00,280.49 in the previous month.

In Mumbai, the ATF price for non-scheduled carriers and charters is now at ₹1,94,968.67 in comparison to last month's ₹90,451.87, it is one of the cheapest among the major cities.

ATF price hikes for non-scheduled carriers and charters 

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The airfare costs are expected to rise for customers due to the exponential ATF price hikes.

The move comes after Civil Aviation Minister K Rammohan Naidu said in the Rajya Sabha on March 30 that the country has an adequate supply of ATF for next two months.

"We have an adequate supply of ATF in our country right now. The regular process is that the production that happens for ATF, almost half of it is for domestic consumption and half is exported," Naidu had said while responding to a query on the oil crisis in India amid the war, as per news agency PTI.

"We have supplies for the next 60 days without any interruption, and we don't foresee any kind of problem in the ATF production in our country," he added.

Govt exploring options to cool down ATF prices

The Civil Aviation Ministry is exploring options and evaluating intervention options with stakeholders to control the steep rise in the ATF prices, sources told CNBC-TV18.

The Centre may urge states to cut VAT on ATF to ease airline cost pressures. Meanwhile, the airlines and oil marketing companies (OMCs) are working to cap ATF crack spreads between $10 and $22 per barrel, they added.

A crack spread is the refining margin of the refinery. It averages around $15-30/ barrel but have spiked sharply to $70+ per barrel due to the West Asia war. Capping this margin could help in stabilising the volatile jet fuel costs for airlines.

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