India’s airlines have asked state-run oil refiners to hold off on hiking jet fuel prices for domestic flights until the conflict in the Middle East ends, people familiar with the matter said, in a bid to alleviate their rising cost pressures and mounting losses.
The proposal floated by airlines including Air India Ltd., IndiGo and SpiceJet Ltd. is being considered by the refiners, said the people, who asked not to be named because the discussions are private. India’s oil and gas ministry is also involved in discussions, and may intervene again as it did in April and May.
A decision is expected before June 1.
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So-called aviation turbine fuel prices in India are set by the country’s oil marketing companies, which usually make any revisions on the first day of the month. The price setting has been deregulated for years, but in April — after global oil prices surged due to the Iran conflict — the government limited the most recent jet fuel price hike to 25% and required the oil majors to keep them constant in May.
The state-owned refiners, which include Indian Oil Corp., Hindustan Petroleum Corp. and Bharat Petroleum Corp., are also discussing whether to raise jet fuel prices in June by up to 25% for domestic flights, the people familiar said. They have been selling jet fuel for domestic flights at about 105,000 rupees ($1,090) per kiloliter, incurring a loss of 92,000 rupees per kiloliter, the people added.
Spokespeople for India’s oil ministry, the oil refiners and the airlines either didn’t comment or didn’t respond to emailed requests for comment.
