Aviation fuel prices rise for second consecutive month; fears of costlier international travel grow

ATF price hike: Rising international ATF prices for the second consecutive month signal costlier foreign travel, while fuel rates for domestic flights remain stable.

Aviation Turbine Fuel Price: The impact of rising aviation fuel prices in the international market for the second consecutive month has led to growing fears that international travel may become more expensive. However, there is temporary relief for passengers flying within the country, as fuel rates for domestic airlines have been kept stable.

Indian Oil (IOC) clarified in its statement that despite rising crude oil costs, the burden has not been passed on to domestic airlines. The company stated that oil firms are absorbing the increased input costs, resulting in no change to Aviation Turbine Fuel (ATF) prices for the month of May. Typically, ATF prices are fixed on the first of every month based on international costs.

The situation differs for international flights. Fuel prices for foreign routes have increased for the second month running, which may impact the pockets of passengers travelling abroad.

Reduction in export duty on ATF

Meanwhile, the government has provided relief by cutting the export duty on ATF. Under the new decision effective from 1 May, the export duty on ATF has been reduced to ₹33 per litre, which will attract only Special Additional Excise Duty (SAED).

The export duty on diesel has also been reduced. The total duty on diesel exports will now be ₹23 per litre, consisting entirely of SAED, while the Road Infrastructure Cess (RIC) has been kept at zero. No duty will be levied on petrol exports, continuing the previous policy.

Notably, the government had increased export duties on petroleum products in April. At that time, duty on ATF was ₹42 per litre and diesel was ₹55.5 per litre. These new cuts provide relief to companies, and the impact of this significant government decision may be seen in the market moving forward.