Jet fuel price hiked by marginal 0.8%

Jet fuel or ATF prices were today hiked by a marginal 0.8% in step with rise in import cost due to rupee depreciation. The increase follows a steep 4.5% cut last month, the first reduction in rates in six months.

Aviation Turbine Fuel, or ATF, price at Delhi was hiked by Rs 597.48 per kl, or 0.8%, to Rs 74,204.74 per kl, according to Indian Oil Corp, the nation's largest fuel retailer. ATF prices had touched a life time high of Rs 77,089.42 per kilolitre (kl) in October following five consecutive increases since June as rupee depreciated against the US dollar, making oil imports costlier.

However, the rupee's appreciating there after helped trim imported cost, leading to cut in prices in November. However, rates have been increased again as rupee value has dipped marginally. In Mumbai, jet fuel costs Rs 76,658.27 per kl from today as against Rs 76,035.89 per kl previously. Rates at different airports vary because of difference in local sales tax or VAT.

Jet fuel constitutes over 40% of an airline's operating costs and the price hike will raise the fuel cost of the cash-strapped carriers. No immediate comments were available from the airlines on the impact of the price reduction 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.