Oil companies have implemented a substantial increase in the prices of commercial LPG, which is primarily used in establishments like hotels and restaurants. The latest price hike of Rs 209 per cylinder has resulted in a 19-kg commercial LPG cylinder now costing Rs 1,731.50 in the national capital and Rs 1,684 in Mumbai. This price adjustment effectively reverses the Rs 157.5 per cylinder reduction in commercial LPG prices that was put into effect on September 1, coupled with a Rs 100 reduction that occurred on August 1.
Commercial LPG Prices Surge and Jet Fuel Costs Rise, Posing Challenges for Businesses and Airlines
One of the driving factors behind these price fluctuations is the increase in the benchmark Saudi Contract Price (CP) for LPG. This price increase aligns with the trend seen in crude oil prices, which have been steadily rising in recent weeks due to concerns surrounding supply.
In addition to the LPG price increase, jet fuel prices, also known as Aviation Turbine Fuel (ATF), have witnessed a consistent upward trajectory. This marks the fourth consecutive monthly increase since July. Following the steepest-ever 14.1 percent surge of Rs 13,911.07 per kilolitre that took place on September 1, there was an 8.5 percent or Rs 7,728.38 per kilolitre increase on August 1. The recent ATF price hike has further compounded the financial challenges faced by airlines, with a rise of Rs 5,779.84 per kilolitre, equivalent to 5.1 percent, in the national capital. This has elevated the cost to Rs 118,199.17 per kilolitre, up from Rs 112,419.33.
Jet fuel is a substantial component of an airline’s operating expenses, accounting for 40 percent of the total expenditure. The continued increase in ATF prices has intensified financial pressures on airlines, exacerbating their existing financial difficulties.
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