The price of Aviation Turbine Fuel (ATF) for domestic airlines has been raised by Rs 6.28 per litre, or 5.46 per cent, for the second consecutive month, taking the fuel rate to Rs 121.28 per litre from Rs 115. The latest increase follows a Rs 5 per litre reduction in July, when the domestic ATF price was brought down to Rs 110 per litre. The rate was subsequently raised to Rs 115 per litre in the August revision.

With the latest increase, the ATF price is now Rs 11.28 per litre higher than the July level, marking a reversal after the cut at the beginning of July.

Government's Review Mechanism

The government reviews petroleum product rates every two weeks based on average international prices of crude oil, petrol, diesel and ATF during the period since the previous review. The previous revision was made on August 15.

Previous Revision on Export Levies

In the August 15 revision, the Special Additional Excise Duty (SAED) on ATF exports was fixed at Rs 19.5 per litre, while the levy on diesel exports was set at Rs 24 per litre. The levy on petrol exports was reduced to nil. The August revision was part of the government's fortnightly review of export levies on petroleum products. The government had said the changes applied to exports, while existing excise duty rates on petrol and diesel cleared for domestic consumption remained unchanged.

LPG Cylinder Price Also Increased

Alongside the latest ATF revision, the price of a 5-kg Free Trade LPG (FTL) non-domestic cylinder has also been increased by Rs 2 per cylinder, or 0.26 per cent, from Rs 762 to Rs 764.

Impact on Airlines and Airfares

The latest ATF increase takes the fuel rate for domestic airlines to Rs 121.28 per litre, following two successive monthly increases after the July reduction. The increase could put pressure on airlines' operating costs, as Aviation Turbine Fuel (ATF) accounts for a major chunk of their costs. If higher fuel prices persist, airlines could face greater cost pressures, which may in turn put upward pressure on airfares. (ANI)