Oil retailers hike ATF rates, slash commercial LPG cylinder prices
Oil marketing companies have raised jet fuel prices and slashed prices of commercial LPG (liquefied petroleum gas) cylinders with effect from Wednesday.
In the national capital, the price of aviation turbine fuel (ATF), or jet fuel, has been increased by ₹749.25 to ₹1,01,642.88 per kilolitre.
According to the Indian Oil Corp's website, the price of ATF in Kolkata, Mumbai and Chennai has been revised upwards to ₹1,10,583.13, ₹95,173.70 and ₹1,05,602.09 per kilolitre, from ₹1,09,898.61, ₹94,466.41 and ₹1,05,399 in April.
The increase in ATF prices comes at a time when global energy market has witnessed massive volatility over the past month amid escalation in the Israel-Iran tensions.
On April 5, Brent crude touched a high of $91.17 per barrel, the highest since October last year. At the time of writing the story, the June contract of Brent on the Intercontinental Exchange was at $87.86 per barrel, lower by 0.61% from its previous close.
Also read: Oil prices decline amid Israel-Hamas peace talks, Fed rate cut expectations
The increase in fuel prices may also prompt Indian airlines to raise flight ticket rates as expenses on jet fuel account for about 40% of a carrier's operating cost.
Meanwhile, the retail price of a 19 kg commercial LPG cylinder, used in hotels and restaurants, has been cut by ₹19 per unit and is now available for ₹1,745.50 in the national capital.
In Mumbai and Chennai, the cost of purchasing a commercial LPG cylinder has declined to ₹1,698.50 and ₹1,911 respectively. In Kolkata, the price fell by ₹20 per cylinder to ₹1,859.
Previously, the prices were lowered by up to ₹32 per cylinder on 1 April.
The second consecutive reduction comes amid the ongoing Lok Sabha elections when the opposition has been raising the inflation issue.
India's consumer price index (CPI)-based retail inflation fell to 4.85% in March. It was the first time after November 2023 that it had moved below 5%.
Domestic LPG, petrol and diesel prices, which have a significant impact on the common man's budget, however, have not been revised.
In March, on the heels of the announcement of the model code of conduct for the elections, the government announced a cut of ₹100 in domestic cooking gas prices and also extended the ₹300 subsidy for LPG cylinders for beneficiaries under the Pradhan Mantri Ujjwala Yojana for FY25.
The state-run oil marketing companies also reduced the price of petrol and diesel by around ₹2 per litre with effect from 15 March, after a nearly two-year hiatus, just ahead of the imposition of the model code of conduct.
Also read: Crude oil prices set to end April flat amid easing Middle East tensions
The decline in oil prices could be attributed to increasing crude inventories in the US and the anticipation of a ceasefire agreement in the Middle East. Various factors, such as fluctuations in international oil prices, changes in taxation policies, and shifts in supply-demand dynamics, are the factors that influence price changes.
The Indian National Congress has often launched attacks at the ruling BJP-led National Democratic Alliance (NDA) government at the Centre for failing to control fuel prices. High fuel and oil prices have a ripple effect on the prices of essential food items and other commodities.
Also read: Oil prices down nearly 1% on growth concerns, high US inventory
Meanwhile, the central government has also reduced the windfall tax on crude petroleum with the special additional excise duty (SAED) now revised to ₹8,400 per tonne from ₹9,600.
On 16 April, the government had updated the windfall tax on petroleum crude to ₹9,600 per tonne from ₹6,800.
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