In a significant development to mark the beginning of 2025, Oil Marketing Companies (OMCs) announced price cuts for commercial LPG cylinders and Aviation Turbine Fuel (ATF) on January 1. The move is expected to provide relief to businesses and airlines amid months of fluctuating fuel costs.
Key Price Reductions
- Commercial LPG Cylinder (19 kg): Prices have been reduced by ₹14.5, bringing the cost to ₹1,756.5 in Mumbai and ₹1,804 in Delhi.
- Aviation Turbine Fuel (ATF): Prices have been slashed by ₹1,401 per kilolitre, with the new price in Delhi standing at ₹90,455.47 per kilolitre.
This reduction in commercial LPG prices follows months of incremental hikes, offering much-needed respite to restaurants, small businesses, and medium-scale enterprises reliant on these cylinders for their operations.
Domestic LPG Prices Unchanged
While the cuts benefit commercial establishments, households using the standard 14 kg LPG cylinders will not see a change in prices. This decision has left some consumers disappointed, as domestic LPG costs remain a sensitive issue for many families.
Impact on Airlines
The reduction in ATF prices is expected to provide relief to airlines, a sector that has been grappling with rising operational costs. ATF, which is not under the GST regime, varies in price across states based on local taxes. The recent cut comes after a hike of ₹1,318.12 per kilolitre during the December revision, according to a Mint report.
While the price drop could ease financial pressures on airlines, its impact on passenger fares remains uncertain. Industry experts suggest that airlines may choose to retain the benefits to offset previous losses rather than pass them on to customers.
Broader Implications
The reduction in commercial LPG prices is anticipated to benefit small businesses and establishments producing perishable goods, potentially lowering operational costs.
For airlines, the debate over ATF’s inclusion in the GST regime continues. As a critical component of airline expenses, any fluctuation in ATF prices directly impacts the industry’s financial health.