India News: Jet fuel prices reach record high amid Iran war

Indian oil companies increased the price of liquefied petroleum gas (LPG) cylinders for commercial use by Rs 195.5 ($2.1, €1.8) on Wednesday, amid rising energy costs due to the Iran war. 

A commercial gas cylinder now costs Rs 2,078.50 ($22.3, €19.26) in the national capital.

Public oil companies revise the rates of their products, such as cooking gas and jet fuel, on the first day of every month according to the market rates.

Prices of commercial cooking gas, widely used across the hospitality sector, were increased by Rs 114.5 ($1.23, €1) in March. Domestic LPG cylinders saw a Rs 60 ($0.6, €0.56) increase last month but was left unchanged on Wednesday. 

Restaurants and hotels in several Indian cities has raised an alarm in March that the rising cost of cooking gas would force many of them to shut.

Indian airlines have thanked the government for intervening and staggering the rise in aviation fuel prices for domestic flights.

"We would like to thank the Hon'ble Prime Minister for such a significant step for all of us. We would also like to convey our heartfelt appreciation to the Ministry of Civil Aviation and the Ministry of Petroleum and Natural Gas," said IndiGo, in a post on X. 

IndiGo is India's largest airline in terms of market share and number of flights.

It said that the government's move would afford them "greater stability" and allow more affordable travel for domestic fliers. 

Ajay Singh, CEO of Indian Budget airline SpiceJet, also thanked the respective ministers. 

"Their timely intervention will go a long way in helping airlines navigate one of the most challenging global crises in recent times, marked by severe external disruptions and volatility in fuel markets," he said in a statement.

Indian public sector oil companies have more than doubled the price of aviation turbine fuel, with prices in New Delhi reaching Rs 207,341.22 ($2,212 or €1,911) per kiloliter, Indian media reported.

This is the first time jet fuel prices have crossed the Rs 200,000 mark in India for domestic flights. The previous high was about Rs 110,000 when Russia invaded Ukraine in 2022.

The price of jet fuel for international flights also saw a 107% increase.

Indian oil companies determine the market price of aviation fuel and announce the revised rate on the first day of every month. 

The hike is due in part to the disrupted fuel supply chain in the Middle East, and partly due to the Indian rupee's worst performance in 14 years. 

In March, Indian airlines had announced a fuel surcharge for domestic and international flights, citing the steep rise in crude oil prices since the US and Israel began their war in Iran. Airlines may revise this surcharge in the coming days. 

Under normal conditions, India's aviation ministry enforces a price cap on air fares to ensure affordable tickets for Indians. However, in light of the Iran war, the ministry suspended this price ceiling last month to allow airlines to adjust ticket prices as required.

Government takes the pressure off

The record rate of jet fuel raised immediate concerns about its impact on airlines' profitability and the prices of domestic air tickets for consumers. 

India's petroleum ministry attempted to assuage these concerns in a post on social media, saying Indian oil companies would stagger the price increase to airlines. 

"In order to insulate the domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies of the Ministry of Petroleum, in consultation with the Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% (only Rs.15/litre) to the airlines," it said. 

Airlines will have to pay the full price for international routes, it added.

Good morning, and welcome to DW's India blog!

This is Mahima Kapoor from the New Delhi Bureau, here to bring to you the country's biggest headlines and talking points of the day. 

The national capital is still enjoying a cooler-than-normal start to summer due to an ongoing atmospheric disturbance, which brought rain and thunder to large parts of India in March.

With the pleasant weather comes some unpleasant news that I'm sure many across the country wish were an April Fool's Day hoax: India's public oil companies have hiked the prices of jet fuel and commercial LPG cooking gas over the energy crisis from the war in the Middle East. The rising prices are likely to trickle down to impact customers.

In other news, India is kicking off a massive population survey, mandated under the Indian constitution, which will see millions of census officials go door-to-door to collect pertinent data about Indians. This data will impact government policies and social programs for the next decade.

Stick with us as we break down the day's news for you.