The Centre has capped the monthly increase in jet fuel prices to a maximum of 25 per cent for domestic flights, according to an official statement cited by news agency Reuters on Thursday. Speaking on the government’s decision to cap jet fuel prices for domestic flights, Defence Minister Rajnath Singh hailed the step, saying the move would help protect passengers from sudden increases in airfare.
This comes amid the deepening global energy crisis sparked by the heavy disruption to maritime traffic through the Strait of Hormuz.
The critical energy choke point, which accounted for nearly a fifth of the world’s energy flows before the current war in the Middle East, has remained effectively shut since early March due to the ongoing armed conflict between Israel and the US on one side, and Iran and its proxies on the other.
The Prime Minister Narendra Modi-led government imposed the purported 25 per cent cap a day after Indian retailers on Wednesday, April 1, raised prices of jet fuel, also known as aviation turbine fuel (ATF), by 8.5 per cent.
According to the Ministry of Petroleum and Natural Gas, ATF is a deregulated product and prices are revised in accordance with international benchmarks. With global crude oil prices soaring, a steep rise in jet fuel rates was also expected from April 1.
The ministry maintains that “only a partial and staggered increase of 25 per cent (only Rs 15 per litre or Rs 15,000 per kl)” is being passed on to airlines even though oil prices have jumped to over USD 100 per barrel in one month.
The price hike coincided with low-cost carrier IndiGo, which is India’s biggest airline, announcing revised fuel charges ranging from Rs 275 to Rs 10,000.
“Although fully offsetting the fuel price increase would require substantial fare revisions, IndiGo has passed on a relatively smaller amount to customers, keeping in mind the consequential burden on them,” the airline said in a statement quoted by news agency PTI on Wednesday.
IndiGo has been levying fuel charges ranging from Rs 425 to Rs 2,300 on domestic and international flight tickets since March 14 in the wake of the spike in fuel prices triggered by the ongoing armed conflict.
(With inputs from agencies)
