Egypt fire singes India
Airfares are likely to go up as jet fuel prices have already been hiked and petrol prices can rise again, following the turmoil in Egypt. The mounting political tension in Egypt is impacting global crude oil prices, which are close to the $100 a barrel mark. Anupama Airy reports. Why India remains cautious | Picsdelhi Updated: Feb 01, 2011 09:15 IST
Airfares are likely to go up as jet fuel prices have already been hiked and petrol prices can rise again, following the turmoil in Egypt.
State-owned oil companies on Monday announced a 4.5% hike to Rs 50,958.79 per kilolitre of jet fuel, as global oil prices rose, due to supply uncertainty from West Asia.
The hike — the eighth in four months — could mean a rise in fares. Fuel accounts for 40% of airlines’ costs. Airlines, however, didn’t comment on this possibility.
The mounting political tension in Egypt is impacting global crude oil prices, which are close to the $100 a barrel mark. The price of crude rose 18 cents to $99.60 a barrel. Egypt unrest: See pics
Oil firms see this as “a worrying trend” that could lead to another petrol price hike. The under-recoveries — the difference between the cost and sale price of fuel —on petrol is close to R3 and for diesel, R 8 per litre, a senior oil company official said.
“The possibility of another petrol price hike has arisen,” the official said. Government officials shot down the possibility of an immediate rise.
“We cannot comment on the timing of the next fuel price hike, but the situation is worrying,” outgoing chairman and managing director of Indian Oil Corporation BM Bansal told HT.
After the oil prices decontrol, petrol prices are set according to international prices, while diesel prices are controlled by the government. Sensex gets Egyptian flu
On January 15, oil firms increased petrol prices by R 2.50 per litre, the second hike after December 15. Oil company officials said the Egypt situation could also hit supply through the Suez Canal. About 1.8 million barrels of oil pass through the canal every day.