(April 1): India rolled back a huge hike in jet-fuel prices for local flights within hours of pushing them to a record, bringing fresh turbulence to an industry that’s been rocked by the war in the Middle East.
State-owned Indian Oil Corp — which leads pricing moves — had initially doubled the price in New Delhi to 207,341 rupees a kilolitre for April. Hours later, it revised them to 104,927 rupees, according to its website.
The price for “domestic markets was expected to increase by more than 100% on 1 April", the oil ministry said in a statement on X, citing factors including the closure of the Strait of Hormuz. However, state fuel retailers have passed only a partial and staggered increase, it added.
The war in the Middle East between the US, Israel and Iran has thrown the global energy market into turmoil, with the near-total closure of the key waterway choking off exports. Crude oil has surged on the widening disruption while product prices — including jet fuel — have rallied even more.
India — the world’s third-largest oil user and a major buyer of gas — has been hit particularly hard by the crisis. A deepening energy crunch has hurt businesses and consumers, with an acute shortage of cooking gas. The rupee has collapsed to a record low against the US dollar.
The jump in jet fuel — had it been implemented in full — would have been a heavy burden for local airlines, which are already grappling with thin margins.
See also: Oil steadies as traders weigh outlook for resolution to Iran war
In usual times, India typically exports nearly half of the aviation fuel it produces. Still, Prime Minister Narendra Modi’s government last month imposed export taxes on the fuel to boost local stockpiles.
Other airlines across the region have also been hit by the war, which began at the end of February. Carriers from Vietnam to New Zealand have begun cancelling flights as costs soared, while China — the world’s largest oil importer — has curbed fuel exports to secure domestic supply.
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