Oil PSUs hike ATF prices by 3.7%

State-owned oil companies today hiked jet fuel price by a steep 3.7%, the third increase in rates in a month.

The price of aviation turbine fuel (ATF), or jet fuel, at Delhi was raised by Rs 2,312 per kilolitre (kl), or 3.7%, to Rs 64,622 per kl with effect from midnight tonight, an official of Indian Oil Corp, the nation's largest fuel retailer said.

The increase comes on back of a 2% (Rs 1,195 per kl) hike effected from November 16. Prior to that rates had been raised by a massive 3.8% or Rs 2,845 per kl from November 1.

But for a one-off marginal reduction in mid-October, ATF prices have been on the climb since September as falling rupee made imports costlier.

The official said Rupee has averaged closer to 52 per dollar this fortnight, 4% weaker than the 49.72 in the preceding two weeks.

Jet fuel was priced at Rs 56,260 kl in September.

ATF in Mumbai will cost Rs 65,650 per kl from tomorrow as against current rate of Rs 63,228.40 per kl, an increase of Rs 2,422 per kl.

Jet fuel makes up for 40% of an airlines' operating cost and the steep hike in prices will raise burden on the cash-strapped airlines. No immediate comment was available from airlines on the impact of the price hike on passenger fares.

The three fuel retailers revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.