After two successive cuts, state -owned oil firms today hiked jet fuel or ATF prices by 2.4% in step with the firming international rates.
Oil companies hiked aviation turbine fuel (ATF) prices by Rs 1,377 per kilolitre (kl), or 2.4%, to Rs 57,843 per kl in Delhi with effect from midnight tonight, an official of Indian Oil Corp, the nation's largest fuel retailer, said.
The hike comes after two reductions on May 16 and June 1. In these two cuts, the first in over eight months, ATF prices had come down by Rs 4,094 per kl.
ATF price in Mumbai, home to nation's busiest airport, was hiked by Rs 1,434 to Rs 58,601 per kl.
Rate cuts on May 16 and June 1 had come after 14 successive hikes since October, 2010, when international crude oil prices started soaring.
The ATF price in Delhi on October 1, 2010 was Rs 40,728.52 per kl. The rates were increased by Rs 19,831.48 per kl, or 48.7% till April 30, when last price hike before today's was announced.
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No comment could be immediately obtained from airline companies on the impact of the price reduction on passenger fares.
Fuel cost accounts for 40% of the airlines' operating cost and rates vary from airport to airport depending upon the local sales tax.
IOC and its sister public sector retailers Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.