Jet fuel prices rose for a fourth straight month and commercial cooking gas for a second, as the October rise in oil feeds into domestic prices. Household LPG stayed unchanged, which keeps the cost of the oil shock away from families but leaves it with state oil companies and, eventually, the government.
State-owned oil companies raised aviation turbine fuel (ATF) prices by ₹1.37 a litre to ₹138.50 from Sunday, 1 November. It is the fourth straight monthly increase. ATF rose ₹16 a litre on 1 October, ₹6.28 on 1 September and ₹5 on 1 August.
The price of a 19-kg commercial LPG cylinder, used by hotels, restaurants and small businesses, rose ₹10 to ₹2,820, the second straight monthly increase after a ₹62.50 rise in October.
The price of a 14.2-kg household LPG cylinder stayed at ₹942.
Airlines bear the cost
The ATF increase is relatively small this month, but it adds to a large cumulative rise. Jet fuel accounts for roughly 40% of airline operating costs in India. IndiGo reported this week that its fuel bill rose 67% in the September quarter, contributing to a ₹1,879 crore loss. CEO Willie Walsh said he had never seen such a sharp rise in fuel prices in 47 years in the industry.
With ATF rising again in November, airfares during Diwali and the winter holidays are unlikely to come down. IndiGo has already said it will limit capacity growth in the December quarter to protect fares, which usually means fewer seats and higher prices for travellers.
Commercial LPG
The commercial LPG figures show how much prices have moved this year. Commercial LPG rose by ₹1,373 a cylinder between February and June, from ₹1,740.50 to a record ₹3,113.50, before easing in July and August. It has now risen again for two months, to ₹2,820.
That matters for restaurants, hotels and small businesses such as dhabas and caterers. A ₹10 increase is small, but the overall level is more than 60% above February’s. Many restaurants have already raised menu prices, which adds to food inflation.
Why household LPG is frozen
Household LPG has stayed at ₹942. That is a policy decision. Cooking gas prices are politically sensitive, and the government has kept them unchanged during the crisis.
Someone still pays the difference. When international LPG prices rise and domestic prices stay fixed, state oil companies sell LPG below cost and record losses, called under-recoveries. Eventually the government usually compensates them through subsidies, which adds to fiscal pressure.
That connects to Friday’s fiscal data, which showed subsidies driving the deficit up to 42% of the annual target. Fixed household LPG prices, fixed fertiliser prices and largely unchanged petrol and diesel prices together mean much of the oil shock is being absorbed by state oil companies and the government rather than by households.
What next
The next revision is on 1 December. If Brent holds above $110, or rises after Tuesday’s US election, ATF and commercial LPG are likely to rise again. The bigger question is whether the government can keep household LPG at ₹942 if oil stays this high, and what that will cost the budget.
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