Aviation Turbine Fuel (ATF) and commercial LPG prices were cut on Wednesday as easing tensions in West Asia pulled down international oil prices, while private fuel retailer Nayara Energy lowered petrol and diesel prices, becoming the first retailer in more than two years to reduce pump rates.
ATF prices were reduced by about Rs 5 per litre, bringing the price in Delhi to around Rs 110 per litre, industry sources said. The reduction is the first since the recent spike triggered by the West Asia conflict.
Oil marketing companies also cut the price of commercial LPG by Rs 183.50 per 19-kg cylinder, the first reduction this year.
Commercial LPG will now cost Rs 2,930 per cylinder after touching a record Rs 3,113 last month as geopolitical tensions pushed up crude oil prices.Alongside, the 5-kg marked-priced or Free Trade LPG (FTL) cylinder cost was also reduced by Rs 13 to Rs 808.50 per 5-kg cylinder.Prices of domestic 14.2-kg LPG cylinders were left unchanged at Rs 942.
Last month, the government introduced an ATF price stabilisation scheme under which participating airlines could buy jet fuel at a fixed price of Rs 115 per litre for up to three years. Airlines that do not opt for the scheme continue to pay prevailing market rates.
Under the mechanism, if benchmark ATF prices rise above the base rate of Rs 86.32 per litre – equivalent to a retail price of Rs 115 per litre after airport charges, oil company margins and applicable taxes – the government will provide interest-free advances to oil marketing companies to bridge the difference.
When benchmark prices fall below the base rate, the excess amount will be recovered from the companies and credited back to the Consolidated Fund of India.It was not immediately known how many airlines had opted for the stabilisation scheme.Industry sources said the Rs 110 per litre jet fuel price is for domestic airlines.State-owned fuel retailers revise ATF and commercial LPG prices on the first day of every month based on the average international benchmark price in the preceding month and foreign exchange rates.
Separately, Nayara Energy cut petrol prices by Rs 5 per litre and diesel by Rs 3 per litre across its network of more than 7,000 fuel stations, sources said.
The move follows a decline in global crude prices after concerns over supply disruptions eased with the de-escalation of hostilities in West Asia and the reopening of a key maritime route.Nayara had been among the first retailers to raise fuel prices after the outbreak of the Iran conflict triggered a spike in international oil prices. On March 26, it increased petrol prices by Rs 5 per litre and diesel by Rs 3 per litre.
State-run fuel retailers followed, raising petrol and diesel prices by a cumulative Rs 7.50 per litre each in a series of revisions during the second half of May, reflecting higher international crude prices and elevated product costs.
State-owned Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), which together account for more than 90 per cent of India’s fuel retail market, left prices unchanged. In Delhi, IOC continues to sell petrol at Rs 102.12 per litre and diesel at Rs 95.20 per litre.
The reduction effectively reverses Nayara’s previous fuel price increase and marks the first retail price cut by any fuel retailer in more than two years.
Sources said Nayara, which operates a 20-million-tonnes-per-year refinery at Vadinar in Gujarat, has completed a refinery turnaround and is operating at full capacity to meet domestic demand.