Aviation turbine fuel prices for domestic airlines remained unchanged for a second straight month on Monday, while the rates for international carriers were slashed by 27 per cent in line with easing global benchmarks. At the same time, state-owned fuel retailers raised prices of commercial LPG and market-priced 5-kg cylinders.
Aviation turbine fuel (ATF) for domestic airlines will remain at Rs 1,04,927.18 per kilolitre, a level unchanged since April, after oil marketing companies absorbed higher international energy costs to avoid an immediate impact on airfares.
International carriers, which pay market-linked rates, will benefit from a cut of more than USD 400 per kilolitre, with ATF prices dropping to about USD 1,100 per kl from USD 1,511.86 per kl in May, industry sources said.
Rates for overseas airlines had more than doubled to USD 1,435.31 per kl in April amid a spike in global energy prices. In May, prices were raised by USD 76.55, or 5.33 per cent.
Meanwhile, commercial LPG prices were increased by Rs 42 per 19-kg cylinder, taking the rate in Delhi to a record Rs 3,113.50 from Rs 3,071.50 previously. The increase follows a sharp Rs 993 hike effected on May 1.
The higher commercial LPG prices will raise fuel costs for hotels, restaurants and other businesses that rely on the fuel. Prices of 5-kg free-trade LPG cylinders were also raised by Rs 11 to Rs 821.50 per cylinder.
Household consumers were shielded from the latest increase, with the price of the 14.2-kg domestic LPG cylinder remaining unchanged at Rs 913.
The divergence reflects the government's policy of insulating households from volatility in international LPG markets. While commercial LPG rates are revised monthly in line with global benchmarks, domestic cooking gas prices are administered and supported through subsidies and compensation to state-owned fuel retailers.
The monthly revisions come as international fuel prices ease after recent disruptions in global energy markets pushed costs sharply higher.
At a news briefing, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said state-owned firms were losing Rs 30 per litre (Rs 30,000 per kl) at the current ATF price for domestic carriers.
There was no change in the prices of petrol and diesel after rates went up by about Rs 7.50 per litre last month. Petrol currently costs Rs 102.12 per litre and diesel Rs 95.20 in Delhi.
ALSO READ | Oil Shock Looms: Brent Jumps 7% As Iran Renews Hormuz Threat, Adds Bab el-Mandeb Warning
Household consumers were spared any increase, with the price of the 14.2-kg domestic LPG cylinder remaining unchanged at Rs 913 since early March, when rates were increased by Rs 60 per bottle.
The revisions are part of the monthly price review undertaken by state-owned oil marketing companies.
Prices vary from state to state depending on the incidence of local taxes such as VAT.
While commercial LPG prices have climbed to record highs, household cooking gas rates have remained unchanged despite a sharp rise in import costs, underscoring the government's efforts to shield consumers from global energy volatility, government sources said.
The cost of supplying a 14.2-kg domestic LPG cylinder has risen by about two-fifths in recent months, driven largely by a surge in international benchmark prices. Yet retail prices for households have remained frozen.
For beneficiaries of the government's flagship Ujjwala scheme, the gap is even wider. A domestic LPG cylinder that costs roughly Rs 1,200 to supply is available to Ujjwala consumers at an effective price of Rs 613 after the Rs 300-per-cylinder direct benefit transfer subsidy, according to government estimates.
The increase in supply costs has been fuelled by a sharp rise in the Saudi Contract Price (CP) for propane, the benchmark used for India's LPG imports. Saudi CP jumped 38 per cent in April after disruptions around the Strait of Hormuz tightened Gulf supplies, according to industry data.
Despite the rise in global prices, India's household LPG rates remain among the lowest in the region, according to government sources. Both subsidised and non-subsidised domestic cylinders are priced below comparable cooking gas cylinders in neighbouring countries, although cylinder sizes vary across markets.
The protection comes at a cost. State-run fuel retailers incurred an under-recovery of Rs 41,338 crore on domestic LPG sales in 2024-25. Following the spike in international prices, the under-recovery for 2025-26 is estimated at around Rs 60,000 crore, according to oil ministry projections.
To offset part of the burden, the government has approved compensation of Rs 30,000 crore to state-owned oil marketing companies in the current fiscal year.
The support framework is tied to the Pradhan Mantri Ujjwala Yojana, under which more than 100 million households have received LPG connections since 2016, alongside a capped subsidy of Rs 300 per cylinder.
Commercial LPG, by contrast, is priced on a market-linked basis and revised every month in line with international benchmarks. Domestic LPG rates are administered and insulated from immediate global price swings - a policy that has helped protect household budgets even as energy costs have surged.
Airlines across the world are facing disruptions amid a tightening jet fuel supply, triggered by the ongoing war in West Asia. The Strait of Hormuz - a critical conduit for global energy flows - remains effectively closed as the conflict enters its fourth month, further straining fuel availability and supply chains.
In India, jet fuel prices were deregulated more than two decades ago, and since then, the rates have been aligned with benchmark international prices, as per a written understanding with the airlines.
But since the West Asia war-induced surge in global energy prices warranted the steepest increase ever to be made in the ATF prices, the government and state-owned oil companies decided to adopt a calibrated approach, industry sources said.
While foreign airlines and other carriers would pay market rates, prices for domestic airlines have been moderated, they said.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
