Airlines got a fuel price scare after state-owned Indian Oil Corporation (IOC) more than doubled its aviation turbine fuel (ATF) price, only to roll back most of the hike within hours on Wednesday.
Its initially notified price for jet fuel was ₹207,341 a kilolitre for April in New Delhi, up 115% from March, marking its highest level ever. This was swiftly revised to ₹104,927 for domestic airlines, a mere 8.5% increase.
Foreign airlines, however, will have to pay the higher price, officials said. Expressions of relief from Indian air-carriers suggest a government role in the downward revision. True, it is consistent with the Centre’s stated preference for gradual hikes in response to an oil shock caused by the war in West Asia. Airfares, thus, aren’t about to spike, though they’re clearly on an incline.
Oil companies will have to bear a significant burden till the point they can cover their input costs. Since air travellers are not among India’s subsidy deserving, even if mass aviation is a policy aim, that process should not be delayed. It’s better to focus on shielding the poor from the ravages of energy inflation. State intervention in times of crisis is justifiable. But market distortions must not be allowed to settle in.