Jet fuel price hiked by 2%

Today's increase in aviation turbine fuel (ATF), or jet fuel, price comes on the back of the biggest ever hike in rates effected from 1st of this month.

ATF at T3 terminal in Delhi has been hiked by Rs 1,429 per kilolitre (kl), or 1.97 per cent, to Rs 73,711 per kl with effect from midnight tonight, according to Indian Oil Corp (IOC), the nation's largest fuel retailer.

The government had on Thursday announced the first hike in diesel rates in more than 14-months, raising rates by Rs 5.63 per litre to Rs 46.95.

Today's ATF price hike and September 1's massive 7.6 per cent (Rs 5,156.16 per kl) increase were trigerred by firming international oil rates and dip in rupee value against the US dollar.

The price hike is the fifth straight increase in rates since July, adding to the burden of cash-strapped airlines. Jet fuel prices are today at all-time high.

In Mumbai, jet fuel will cost Rs 74,332 per kl from tomorrow as against Rs 72,830.64 per kl at present.

Jet fuel constitutes over 40 per cent of an airline's operating costs and the increase in prices will put fresh burden on the cash-strapped airlines.

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 and 16th of every month, based on the average international price in the preceding fortnight.