Fuel costs of airlines will rise as Indian Oil Corporation Ltd. increased aviation turbine fuel prices for the fifth straight month, tracking the rally in crude oil.
The state-run refiner and marketer hiked prices by 5.8 percent over the previous month, the highest jump in 11 months. Jet fuel will now cost Rs 58,986 per kilolitre on an average.
Brent crude has risen from its June low of under $45 a barrel to more than $60 now.
Fuel contributes about a third of airlines' costs. Higher ATF prices could impact their financials in the quarter ending December.
Prices averaged around Rs 56,450 per kilolitre for the third quarter, 12.6 percent higher than the year-ago period. That was also the highest in three years, according to data compiled by BloombergQuint.
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