The price of aviation turbine fuel (ATF), or jet fuel, in Delhi was hiked by Rs 5,146.16 per kilolitre (kl), or 7.6 per cent, to Rs 72,281.92 per kl with effect from midnight tonight, Indian Oil Corp, the nation's largest oil firm, said.
This biggest ever increase in price in absolute numbers comes on back of firming international oil rates and dip in rupee value against the US dollar.
And new rates will have surpased the previous high in ATF price of Rs 71,028.26 per kl hit in August, 2008. The hike in percentage terms is however lower than the 12 per cent hike in rates effected from June 16, 2009 when prices were hiked by Rs 3,948.59 per kl to Rs 36,251.51 per kl.
The price hike from tomorrow will be the fourth straight increase in rates since July, adding to the burden of cash- strapped airlines. Jet fuel, which had hit an all-time high peak of Rs 71,028.26 per kl in August, 2008, shortly after international oil rates touched a record USD 147 per barrel, had fallen to eight-month low of Rs 61,169.08 per kl in early July.
In Mumbai, jet fuel will cost Rs 72,830.64 per kl from tomorrow as against Rs 68,103.26 per kl at present. Jet fuel constitutes over 40 per cent of an airline's operating costs and the increase in prices will put fresh burden on the cash-strapped airlines.
No immediate comments were available from the airlines on the impact of the price hike on passenger fares. The three fuel retailers -- IOC, Hindustan Petroleum and Bharat Petroleum -- revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.