Commercial LPG, jet fuel rates up amid Iran crisis, Pg1

Key Highlights:

• Prices of commercial LPG cylinders increased by over 10% in major metro cities on Wednesday.
• Aviation Turbine Fuel (ATF) prices more than doubled for international air travel and chartered flights.
• Domestic flights faced a smaller ATF rate increase of around 9%.
• The Indian Oil Corporation set the new price of a 19 kg commercial cylinder in Delhi at ₹2,078.5, a hike of ₹195.5.
• Benchmark Saudi Contract prices spiked by 44% between March and April.

Detailed Insights:

• The price hikes are attributed to the ongoing U.S.-Iran war disrupting global LPG supply via the Strait of Hormuz.
• OMCs are incurring losses of ₹380 on every LPG cylinder and significant losses on petrol and diesel sales.
• IndiGo has revised its fuel surcharges, with domestic surcharges ranging from ₹275 to ₹950 and international charges up to ₹10,000 for long-haul routes.
• The Ministry of Petroleum and Natural Gas stated that only a partial increase in ATF prices was passed on to airlines to protect domestic travel costs.
• Commercial LPG rates are deregulated, market-determined, and revised monthly, accounting for less than 10% of total LPG consumption.

Key Concepts Involved:

• Aviation Turbine Fuel (ATF): A type of jet fuel used in aircraft powered by gas turbine engines.
• Liquefied Petroleum Gas (LPG): A flammable mixture of hydrocarbon gases used as fuel in heating appliances and vehicles.
• OMCs (Oil Marketing Companies): Companies responsible for the marketing and distribution of petroleum products.