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 | Pics

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.

HT Image

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.

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.

ElBaradei: Egypt's new leader? | Who's Hosni Mubarak | Timeline: Mubarak's 30-year rule under fire