ATF, commercial LPG and premium fuel prices soar amid oil squeeze

Jet fuel prices were partially raised to cushion domestic travellers despite global surge, while commercial LPG prices were hiked and domestic rates kept unchanged

India’s oil-marketing companies (OMCs) have raised aviation turbine fuel (ATF), or jet fuel, prices for domestic airlines, responding to surging energy costs driven by the West Asia conflict. 

India’s largest airline, IndiGo, responded by replacing its flat fuel surcharge of ₹425 on domestic routes with a slab-based system ranging from ₹275 to ₹950, depending on distance. In the case of international flights, the fuel charges will vary from ₹900 to ₹10,000, depending on the distance; so far, the flat surcharge was ₹2,300. Other domestic carriers have also welcomed the move. 

Furthermore, premium petrol and diesel prices were increased again on Wednesday, while state-run OMCs announced a ₹195.50 rise in the price of commercial liquefied petroleum gas (LPG) cylinders. 

From April 1, Indian Oil Corporation Ltd (IOCL) raised ATF prices to ₹1.05 lakh per kilolitre in New Delhi, an 8.5 per cent increase from ₹96,638 per kilolitre in March. 

In the early hours of Wednesday, IOCL had increased ATF prices by more than 100 per cent to ₹2.07 lakh per kilolitre in line with global trends. The government later intervened, stating that “a partial and staggered increase” of 25 per cent, or ₹15 per litre, would be passed on to airlines to shield domestic travel costs. International routes, however, will bear the full increase. For airlines operating overseas, ATF prices in Delhi rose 107 per cent to $1,690.81 per kilolitre.

 

Senior officials in the oil and aviation ministries declined to comment on whether further increases are likely, saying such decisions remain with OMCs.

 

“In order to insulate the domestic travel costs from the substantial increase in international prices, PSU oil marketing companies of the Ministry of Petroleum, in consultation with Ministry of Civil Aviation, have passed only a partial and staggered increase of 25 per cent (only ₹15/litre) to the airlines,” said Ministry of Petroleum and Natural Gas (MoPNG) in a social media post on X.

 

Jet fuel accounts for more than 40 per cent of Indian airlines’ operating costs. OMCs typically revise ATF prices at the start of each month.

 

Airlines broadly welcomed the intervention, describing it as a stabilising measure amid volatile fuel markets. Air India said the decision brought “welcome relief to the aviation sector in these unprecedented times”, while IndiGo said it would enable “greater stability for airlines” and help pass on benefits to passengers.

 

IndiGo later revised its surcharge structure, replacing the uniform levy introduced in mid-March with a distance-based model. On March 13, the airline had introduced fuel surcharges on the booking of domestic and international flight tickets, citing  rising global ATF prices linked to the West Asia conflict.

 

The airline said the latest recalibration followed the government’s decision to allow only a partial 25 per cent pass-through of recent ATF price increases for domestic operations.

 

Ajay Singh, chairman and managing director of SpiceJet, described the move as “a significant relief” amid global uncertainty, adding that it would help airlines navigate volatility and reinforce confidence in the sector. Akasa Air echoed the sentiment, saying the intervention would create a more stable operating environment, support cost management and help sustain affordable travel while strengthening aviation’s role in infrastructure growth.

 

Hike in commercial LPG prices

 

State-run OMCs also announced a steep ₹195.50 increase in the price of commercial LPG, taking the cost of a 19 kg cylinder in Delhi to ₹2,078.50. The government attributed the rise to a 44 per cent jump in the Saudi Contract (CP) price, from $542 per metric tonne in March to $780 per tonne in April, as 20–30% of global LPG supplies remain disrupted in the Strait of Hormuz.

 

Domestic LPG prices remain unchanged -- at ₹913 for a 14.2kg cylinder in Delhi. At current rates, OMCs are incurring under-recoveries of ₹380 per cylinder, with cumulative losses projected to reach approximately ₹40,484 crore by the end of May.

 

Meanwhile, premium petrol and diesel prices were raised again on Wednesday, even as regular fuel prices remained unchanged. IOC’s XP100 petrol increased by ₹11 per litre to ₹160 per litre in Delhi, while its Xtra Green premium diesel rose to ₹92.99 per litre from ₹91.49. In March, some premium petrol variants had already seen a ₹2 per litre increase.

 

With global petroleum prices rising by up to 100 per cent over the past month, state-run OMCs are now facing under-recoveries of ₹24.40 per litre on petrol and ₹104.99 per litre on diesel at prevailing retail prices

 

With global petroleum prices up by up to 100 per cent in the last one month, state-run OMCs are incurring under-recoveries of ₹24.40 per litre on petrol and ₹104.99 per litre on diesel at current retail prices.