Jet fuel prices surge amid West Asia tensions as Centre discusses rising ATF costs with airlines and oil companies. (Images: X)
New Delhi: The Centre has begun discussions with airlines and oil marketing companies (OMCs) over the sharp rise in aviation turbine fuel (ATF) prices, with the West Asian crisis adding fresh pressure to the aviation sector. Civil Aviation Minister K Rammohan Naidu said that the government is engaging with airlines and fuel companies to assess the impact of elevated jet fuel prices on the industry.
The ongoing geopolitical tensions in West Asia have contributed to volatility in global energy markets, putting additional pressure on aviation fuel costs. ATF is one of the biggest expenses for airlines and accounts for around 40% of their operating costs. Speaking on the sidelines of a conference in New Delhi, Naidu said the government was closely discussing the situation with airlines and OMCs.
The minister highlighted the burden that higher ATF prices are placing on the aviation sector as carriers deal with increased operating expenses.
The development comes a day after IndiGo, India’s largest airline by domestic market share, announced an increase in its fuel surcharge for domestic and international flights. The airline cited the recent rise and volatility in ATF prices while announcing the surcharge hike. IndiGo said fuel prices have remained unstable in recent months, with the situation worsening amid geopolitical developments in the Middle East.
According to IndiGo, the latest month-on-month increase in jet fuel prices has exceeded 14%, pushing ATF costs to among their highest levels in the past decade. The sharp increase has created fresh challenges for airlines, as fuel expenses directly influence ticket pricing and overall operating costs.
With fuel accounting for a substantial share of airline expenditure, sustained increases in ATF prices could put further pressure on carriers' margins. Airlines may also face difficult decisions over fares and additional charges if elevated fuel prices persist, particularly on routes where operating costs are already high.
The Civil Aviation Ministry’s discussions with OMCs and airlines indicate an effort to assess the broader impact of rising fuel prices on the aviation industry. The talks come at a time when international energy prices remain sensitive to developments in West Asia, making the outlook for aviation fuel costs uncertain.
The increase in IndiGo’s fuel surcharge has brought renewed attention to the potential impact of higher ATF prices on passengers. If fuel prices remain elevated for an extended period, the aviation sector could face continued cost pressures, with airlines potentially passing part of the additional burden on to travellers through fares or fuel-related surcharges.
