India raises aviation fuel and commercial cooking gas prices due to Middle East conflict, but shields domestic airlines from the full global cost surge.
NEW DELHI: India’s Ministry of Petroleum announced significant price increases for aviation turbine fuel and commercial cooking gas on Wednesday.
The hikes are a direct consequence of soaring global energy costs driven by the ongoing Middle East war.
The ministry stated that aviation fuel prices for the domestic market were expected to more than double.
This anticipated 100% surge was attributed to the “extraordinary situation” in global markets and the closure of the Strait of Hormuz.
This crucial shipping route for oil and gas has been virtually paralysed by the conflict. To protect the domestic travel sector, authorities opted for a staggered increase instead of passing on the full cost.
The ministry confirmed it had “passed only a partial and staggered increase of 25%” to airlines. This measure aims to “insulate the domestic travel costs from the substantial increase in international prices”.
State-run refiner Indian Oil Corporation reported an 8.5% price rise for ATF in the capital Delhi. Similar increases were implemented in other major cities across the country.
Aviation turbine fuel constitutes a substantial portion of airline operating expenses. Sustained increases could ultimately translate into higher airfares for passengers.
Foreign travel routes will not receive the same protection, however. The ministry added that international operations “will pay for the full increase in ATF prices consistent with what they pay in other parts of the world”.
Commercial cooking liquefied petroleum gas prices have also risen. The cost of a 19-kilogramme cylinder increased by around 200 rupees on average in four key cities.
India is the world’s second-largest buyer of LPG, which is predominantly sourced from the Middle East. It is also the fourth-largest buyer of liquefied natural gas.
