Domestic refiners keep local jet fuel prices unchanged after airlines' plea

By Mihir Mishra and Rakesh Sharma

 

India’s state-owned oil refiners have kept jet fuel prices steady for local flights following a plea from airlines to hold off on further hikes as they grapple with the fallout from the Iran war. 

 

The fuel price for domestic flights will remain unchanged at ₹104,927 ($1,104.25) a kiloliter in New Delhi for June, according to spokespeople from the state oil processors. In April, the cost of so-called aviation turbine fuel was raised by 8.6 per cent, with the government requiring they stay constant in May.

 

Refiners also provided additional relief to Indian airlines by reducing jet fuel prices for international flights, although the spokespeople didn’t immediately provide details on the size of the cut.

   

Last month, India’s airlines asked refiners including Indian Oil Corp. and Bharat Petroleum Corp. to halt price increases for local flights until the end of the war, according to a Bloomberg News report. Key carriers have been forced to reduce flights through March and April due to depressed demand in the world’s third-largest domestic aviation market, after passing on elevated costs to fliers in the form of higher fares.

 

India is heavily dependent on imported crude and fuels, and surging prices due to the conflict in the West Asia are weighing heavily on the nation’s economy. The country’s state-run refiners are racking up huge losses, forcing them to raise the cost of fuels including gasoline to offset some pressure.

 

India has announced a number of measures to soften the blow to the aviation industry, such as rebates on plane parking charges, and tax reductions on fuel for flights operating out of Delhi and Mumbai, its biggest airports. Airlines are also grappling with a weaker rupee, which makes it costlier for them to pay in dollars for aircraft leases and overseas airport charges.

 

The nation’s carriers had been using Iran’s airspace to fly to Europe and America after Pakistan banned them from using its airspace.