Commercial LPG and ATF Prices Hiked: September Fuel Revision Impacts Businesses and Airlines

NEW DELHI: Households may see a momentary respite, but businesses and the aviation sector are facing fresh inflationary pressure as India witnesses a hike in fuel prices effective from Tuesday, September 1. Following two months of consecutive price reductions, the latest monthly revision has brought an upward trend to both commercial cooking gas and aviation fuel.

Commercial LPG Prices Inch Upward

The price of a 19-kg commercial LPG cylinder, a critical utility for restaurants, hotels, and the catering industry, has been increased by Rs 9.50. The revised rate now stands at Rs 2,747.50, up from the previous Rs 2,738. Additionally, the 5-kg Free Trade LPG (FTL) cylinder has seen a price hike of Rs 2, taking its cost to Rs 764.

This adjustment marks a reversal in the trend observed over the past two months. In August, the price of a 19-kg cylinder saw a significant reduction of Rs 192, following a similarly substantial cut of Rs 183.50 in July. These fluctuations reflect the volatility of the global energy market, particularly following the period of instability in West Asia earlier this year, which had caused prices to surge by over Rs 1,300 between February and June.

Aviation Fuel Costs Surge

In a move that is expected to tighten profit margins for domestic carriers, the price of Aviation Turbine Fuel (ATF) has been raised by Rs 6.28 per litre, representing a 5.46% increase. This brings the new rate to Rs 121.28 per litre, up from Rs 115.

This latest hike marks the second consecutive monthly increase for airlines, following a Rs 5-per-litre surge on August 1. Given that fuel expenses can account for as much as 40% of an airline’s total operating costs, the sustained rise in ATF prices poses a significant challenge for the aviation industry’s financial health.

Market Stability for Domestic Consumers

Despite the revisions in the commercial and aviation sectors, there is some relief for the average household. The price of domestic LPG remains steady at Rs 942 for a standard 14.2-kg cylinder. Similarly, retail prices for petrol and diesel across the country remain unchanged.

Prices for ATF and LPG are subject to revision on the first day of every month, adjusted according to international oil benchmark prices and prevailing foreign exchange rates. Consumers are reminded that while base rates are set centrally, the final retail price can vary from state to state due to differences in local taxation, such as Value Added Tax (VAT).