New Delhi: Aviation Turbine Fuel (ATF) prices for domestic airlines were left unchanged for the second consecutive month on Monday, as state-owned Oil Marketing Companies (OMCs) absorbed higher international energy costs to prevent an immediate pass-through to airfares. International carriers, however, saw rates cut sharply by more than 27 percent in line with easing global benchmarks. Separately, state-run fuel retailers raised commercial LPG prices to a record high, while household cooking gas rates remained frozen.
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ATF for domestic airlines will remain at Rs 1,04,927.18 per kilolitre, unchanged since April. At an inter-ministerial news briefing on Monday, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said state-owned firms were losing Rs 30 per litre (or Rs 30,000 per kl) at the current ATF price for domestic carriers.
In India, jet fuel prices were deregulated more than two decades ago and have since been aligned with benchmark international prices as per a written understanding with airlines. But the West Asia war-induced surge in global energy prices would have warranted the steepest-ever increase in ATF prices, prompting the government and state-owned oil companies to adopt a calibrated approach. Under this arrangement, foreign airlines and other carriers pay market rates while prices for domestic airlines are moderated.
International carriers, which pay market-linked rates, will benefit from a reduction of more than USD 400 per kilolitre, with ATF prices dropping to approximately USD 1,100 per kl from USD 1,511.86 per kl in May, industry sources said.
The contrast with recent months is sharp. Rates for overseas airlines had more than doubled to USD 1,435.31 per kl in April amid a spike in global energy prices, before being raised further by USD 76.55, or 5.33 percent, in May. Monday's cut reflects a meaningful easing in global benchmarks as supply conditions stabilise.
Airlines globally are facing disruptions amid a tightening jet fuel supply triggered by the ongoing conflict in West Asia. The Strait of Hormuz — a critical conduit for global energy flows — remains effectively closed as the war enters its fourth month, further straining fuel availability and supply chains.
Commercial LPG prices were raised by Rs 42 per 19-kg cylinder, taking the Delhi rate to a record Rs 3,113.50 from Rs 3,071.50 previously. The latest hike follows a sharp Rs 993 increase effected on May 1. The higher rates will push up fuel costs for hotels, restaurants and other businesses dependent on commercial LPG. Prices of 5-kg free-trade LPG cylinders were also raised by Rs 11, to Rs 821.50 per cylinder.
The price of the 14.2-kg domestic LPG cylinder was left unchanged at Rs 913, where it has remained since early March when rates were raised by Rs 60 per cylinder. The divergence between commercial and household rates reflects the government's policy of insulating domestic consumers from volatility in international LPG markets. Commercial LPG is revised monthly in line with global benchmarks, while domestic cooking gas prices are administered and supported through subsidies and compensation to state-owned fuel retailers.
The cost of supplying a 14.2-kg domestic cylinder has risen by about two-fifths in recent months, driven largely by a surge in international benchmark prices. For beneficiaries of the Ujjwala scheme, a cylinder that costs roughly Rs 1,200 to supply is available at an effective price of Rs 613 after accounting for the Rs 300-per-cylinder direct benefit transfer subsidy, according to government estimates.
The Saudi Contract Price for propane — the benchmark used for India's LPG imports — jumped 38 percent in April after disruptions around the Strait of Hormuz tightened Gulf supplies, according to industry data.
The protection for household consumers comes at a significant fiscal cost. State-run fuel retailers incurred under-recoveries of Rs 41,338 crore on domestic LPG sales in FY2024-25. With the surge in international prices, under-recoveries for FY2025-26 are estimated at around Rs 60,000 crore, according to oil ministry projections. To offset part of the burden, the government has approved compensation of Rs 30,000 crore to state-owned oil marketing companies for the current fiscal year.
More than 100 million households have received LPG connections under the Pradhan Mantri Ujjwala Yojana since 2016, alongside a capped subsidy of Rs 300 per cylinder. Despite the sharp rise in import costs, India's household LPG rates remain among the lowest in the region, according to government sources, with both subsidised and non-subsidised domestic cylinders priced below comparable cooking gas in neighbouring countries.
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Petrol and diesel prices were left untouched after rates rose by approximately Rs 7.50 per litre last month. Petrol currently costs Rs 102.12 per litre and diesel Rs 95.20 per litre in Delhi. Prices vary across states depending on local taxes such as VAT.