ATF rate hiked by 7.5%, commercial LPG down Rs 58.5: What will it mean for flyers and eateries?

New Delhi: Air travel may become costlier for passengers as the price of aviation turbine fuel (ATF) was increased by 7.5 per cent on Tuesday. After three months of reductions, the hike of Rs 6,271.5 per kilolitre takes the new price in Delhi to Rs 89,344.05 per kl.

This spike follows a global rise in oil prices after Israel’s attack on Iran last month. Since fuel accounts for nearly 40 per cent of airline operating costs, the burden is likely to be passed on to flyers through higher ticket prices. Airlines have yet to respond to the development, but budget-conscious travellers may feel the pinch during the upcoming holiday season.

In other major cities, ATF now costs Rs 83,549.23 per kl in Mumbai, Rs 92,526.09 in Chennai, and Rs 92,705.74 in Kolkata. Prices differ depending on local taxes like VAT.

Restaurants, tea stalls get a breather with LPG price cut

While flyers may feel the pressure, commercial establishments such as restaurants, tea stalls and caterers got some relief. The price of commercial LPG cylinders has been slashed by Rs 58.50 per 19-kg bottle, making it the fourth consecutive monthly reduction.

In Delhi, the new rate is Rs 1,665, while Mumbai will see prices drop to Rs 1,616.50. Since April, commercial LPG has become cheaper by Rs 138 per cylinder, a helpful shift for small business owners struggling with overhead costs.

No change in domestic LPG, petrol, or diesel prices

For households, however, the price of domestic LPG remains unchanged at Rs 853 per 14.2-kg cylinder. It was last revised in April with a Rs 50 hike.

Similarly, petrol and diesel prices remain frozen at Rs 94.72 and Rs 87.62 per litre in Delhi, respectively. These rates have been steady since a Rs 2 per litre cut ahead of the general elections in March 2024.

Monthly pricing affects everyday budgets

State-run oil companies — Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) — adjust fuel and gas prices on the 1st of every month, based on international benchmarks and exchange rates. The variation in state-level VAT adds to the uneven burden on consumers.

While the LPG price cut offers modest respite for food businesses, the ATF hike could indirectly affect commoners through pricier domestic travel and logistics.