Mumbai: Right ahead of the festive season this year, the aviation sector has seen a steep hike in traffic, which means people will have to shell out more for tickets. Jet fuel prices have been hiked by a steep 7 per cent taking the rates to a high of over Rs 75,000 per kilolitre.
This is the fourth consecutive monthly hike in the aviation turbine fuel prices, which have now gone up by over 20 per cent since June. Officials said the current increase follows the continuing fall of the rupee against the US Dollar, which has made the import of crude oil costlier.
Aviation Turbine Fuel, or ATF, price at Delhi was hiked by Rs 4,827.94 per kl, or 6.87 per cent, to Rs 75,031.09 per kl, according to Indian Oil Corp, the nation's largest fuel retailer. The increase has been effected from September 1.
The hike comes on back of a steep hikes on July 1 and August 1. ATF price was increased by Rs 3,617.84 per kl or 5.8 per cent on July and by another Rs 4,169.4 per kl, or 6.3 per cent, on August 1. Prior to these, rates had climbed to Rs 62,416.16 per kl on June 1 from Rs 62,649.95 previously.
These hikes follow two steep reduction in rates - by 5.5 per cent (Rs 3884.98 per kl) on April 1 and 5.3 per cent or Rs 3,545.94 per kl from May 1. ATF price in March had touched Rs 70,080.87 per kl in Delhi.
In Mumbai, jet fuel is costing Rs 77632.43 per kl from September 1 as against Rs 72,477.50 per kl previously. Rates at different airports vary because of difference in local sales tax or VAT.
Jet fuel constitutes over 40 per cent of an airline's operating costs. No immediate comments were available from the airlines on the impact of the price hike on passenger fares. The three fuel retailers - IOC, Hindustan Petroleum and Bharat Petroleum - revise jet fuel prices on the 1st of every month, based on the average international price in the preceding month.
Speaking to IBN18 Editor-in-Chief Rajdeep Sardesai, Vikram Mehta, former Chairman of Shell Companies, gave suggestions for controlling the oil pool deficit. "On the supply side, you could increase the production of oil and gas in this country through two measures. One is, if you clear some of the proposals with the ministry of petroleum, some of the producing companies will hike up their production by up to 150,000 barrels a day," he said.
"Secondly there are 165 marginal fields in India of which 105 are under production and these are fields that are declining. Now you could apply enhance recovery methods to increase production from those fields," Mehta added.
"Thirdly on the supply side, you have the possibility of actually expediting exploration and development by simply pushing forward the licencing rounds for exploration," he said.
(With additional information from PTI)