Aviation Gets Costlier, But Your Kitchen Just Got Cheaper — What’s Going On?

India’s energy pricing landscape saw a sharp dual shift on August 1, 2025, as aviation turbine fuel (ATF) prices surged while commercial LPG rates dropped for the fifth consecutive month. The changes, driven by international benchmark fluctuations, are expected to impact both the aviation and hospitality sectors in distinct ways.

Key Developments at a Glance

• Aviation turbine fuel (ATF) prices increased by 2.9 percent across major metros
• Commercial LPG cylinder prices dropped by ₹33.50 per 19-kg unit
• Domestic LPG rates remain unchanged at ₹853 per 14.2-kg cylinder
• Petrol and diesel prices continue to be frozen since March 2024

Aviation Fuel Price Hike: Airlines Brace for Higher Costs

• ATF prices in Delhi rose by ₹2,677.88 per kilolitre, reaching ₹92,021.93 per kl
• Mumbai saw a jump to ₹86,077.14 per kl, while Chennai and Kolkata recorded hikes to ₹95,512.26 and ₹95,164.90 per kl respectively
• This marks the second consecutive monthly increase, following a steep 7.5 percent hike in July
• The recent hikes have erased nearly three-fourths of the gains from three earlier reductions between April and June
• Fuel accounts for nearly 40 percent of airline operating costs, making this increase a significant financial strain

Commercial LPG Price Cut: Relief for Hospitality Sector

• The price of a 19-kg commercial LPG cylinder in Delhi is now ₹1,631.50
• This is the fifth straight monthly reduction, totaling ₹171.50 since April
• Previous cuts included ₹58.50 in July, ₹24 in June, ₹14.50 in May, and ₹41 in April
• The reduction is attributed to softened benchmark LPG rates due to lower seasonal demand
• Restaurants, hotels, and catering businesses are expected to benefit from reduced input costs

Domestic Fuel Prices: Stability Amid Volatility

• Domestic LPG rates remain unchanged at ₹853 per 14.2-kg cylinder
• Petrol is priced at ₹94.72 per litre in Delhi, while diesel stands at ₹87.62
• These rates have been frozen since a ₹2 per litre cut in March 2024, ahead of general elections

Why the Divergence? Global Factors at Play

• The ATF hike is linked to rising international oil prices, driven by geopolitical tensions and trade disruptions
• In contrast, commercial LPG rates have dipped due to reduced summer demand and favorable global supply conditions
• Local taxes such as VAT contribute to price variations across states

Sectoral Impact: Winners and Losers

Aviation Industry

• Airlines may face increased operational costs, potentially affecting ticket pricing and profitability
• No official statements have been issued by carriers regarding fare adjustments

Hospitality and Food Services

• Lower LPG prices offer cost relief to restaurants, cafés, and catering units
• Could lead to more competitive pricing and improved margins in the sector

Consumers

• Household budgets remain unaffected as domestic LPG rates hold steady
• Petrol and diesel price stability continues to shield consumers from global oil volatility

Conclusion

August’s fuel price revision underscores the volatility of global energy markets and their ripple effects across industries. While airlines prepare for turbulence in operating costs, the hospitality sector finds a moment of respite. As geopolitical tensions and seasonal demand patterns continue to shape pricing, stakeholders across sectors will need to stay agile and responsive.

Source: The Hindu

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