Airplane fuel is similar to the fuel used in other common vehicles like the cars you see on the streets. However, it is not always the same in composition, which is why it has a different name and price. While generally called aviation fuel, there are different types and each is meant for slightly different purposes.
So, if you want to learn more about those names and aviation fuel prices, keep reading as we guide you through this small new world for you.
Before we enter into the topics of the names and current aviation fuel prices, it is essential that you understand that petrol and diesel prices depend on the operations of oil companies and the crude oil price. Also, petrol and diesel prices are sensitive to political situations, so they are not usually raised over an election period since most voters perceive petrol prices moving up as a sign of bad politics.
However, fuel prices in the aviation industry are not as politically sensitive. This is because it does not directly affect voters, so rising prices will not take a toll on election day.
With this clear, let’s now take a closer look at the names used for the fuel used in aviation, and the current fuel prices.
As we mentioned already, there are different names used. Many people use the name aviation gasoline, and gasoline was the first type of fuel used when the first aviation turbine engine was developed in 1939, the truth is that current fuels are mostly kerosene-type fuels and not gasoline.
Perhaps, the most common name is jet fuel. Yet, using only this name may not be completely accurate.
Jet fuel would be an adequate name for the fuel used in aircraft powered by jet engines. However, there are airplanes that are powered by other types of engines like piston engines and turboprops.
So, the most common types of fuel found in the Indian aviation industry are described below as well as their prices.
The Aviation Turbine Fuel, also known as ATF is perhaps the most common type of jet fuel found nowadays. It is obtained as a byproduct of crude oil and manufactured to tightly controlled specifications prioritizing volatility, freezing point, specific gravity, sulfur, and aromatic limits, usually to improve safety.
The governing specifications in India are IS 1571: 2018, and according to IndianOil Aviation, the range of fuels used by Indian aviation includes:
Of course, these are only the most common ones since we need to consider that the fuel used will depend on the engine, and there might still be some airplanes powered with diesel engines and using diesel aviation fuel around.
From the list above, JP-5 is a type of jet fuel most commonly used in military aircraft, while Avgas 100 LL is actually aviation gasoline specially designed for piston-engine aircraft, hence the name.
Now, Jet A-1 is perhaps the most common of the three nowadays since it is a kerosene grade fuel suitable for most turbine-engined aircraft and it is widely available around the world.
The main specifications for Jet A-1 grade are the UK specification DEF STAN 91-91 (Jet A-1) NATO code F-35, (formerly DERD 2494), and the ASTM specification D1655 (Jet A-1).
Although we mentioned that jet fuel prices are not as politically sensitive as fuels used by other vehicles, the reality is that they do not escape political measures. What’s more, they are very sensitive to what happens in the international oil markets. Also, the diesel aviation fuel price, as well as the price of the Avgas, usually move similarly to regular gasoline and diesel since they are produced basically in the same way.
A good example of the fact that jet fuel prices do not escape political measures was seen recently in India when the government raised excise duty. Also in India, jet fuel prices are revised periodically. In the past, this was done on the first day of each month. However, with falling international oil prices in early 2020, public sector oil companies adopted fortnightly revisions.
Another measure that was taken by oil companies during that time of downward jet fuel prices included freezing petrol and diesel prices to not pass the excise hike to consumers as well as not passing the Re 1 per liter hike required for switching over to ultra-clean BS-VI grade fuel from April 1st of 2020. It is important to highlight that these have been measures taken many times in the recent history of the country.
Of course, international oil prices quickly rebounded and reached very high levels, as well as international fuel prices. This forced the oil companies to take new measures. News from the Indian national capital, New Delhi, indicated in February of this year that “oil companies had hiked jet fuel prices by about 5% and a kilo-liter (KL, or 1,000 liters) will cost Rs 90,519.8 and Rs 88,987.2 in Delhi and Mumbai, respectively, for domestic flights.” It also included an increase in the market-priced kerosene cost.
Considering that jet fuel represents 40% of the total operating costs Indian airlines have, the higher jet fuel price meant a big hit for the industry.
Given the global economic situation, oil companies have not stopped revising fuel prices. The jet fuel price has changed drastically with every revision since the petrol price climbed from the early 2020 lows.
During the past month of May, the jet fuel price was hiked again, this time by 5.3 percent. This represented the tenth straight increase for the year.
Regularly revised ATF prices are provided through a price notification issued by state-owned oil marketing companies. If we look at the most recent notification, we could get an idea of the cost of 1 liter of airplane fuel. However, we also need to keep in mind that ATF prices differ from state to state, depending on the incidence of local taxation.
To give you an idea, according to petroldieselprice.com, the jet fuel price in Mumbai is Rs 111690 per kiloliter and Rs 111.69 per liter for domestic operated airlines/flights. For international flights, the prices are 1121.67 US Dollars per kiloliter and 1.12167 US Dollars per liter in Mumbai. This means that ATF prices have changed from 41853 to 111690 Rs/KL in the last month for domestic flights and from 1121.67 to 1121.67 $/KL for international flights.
In the case of New Delhi, the prices have moved in a similar way, from 42447 to 112924 Rs/KL in the last month for domestic flights and from 1125.25 to 1125.25 $/KL for international flights.
While it may seem that ATF prices naturally go up with time, the truth is that there have been periods when ATF prices have seen falling international rates.
In fact, a reduction cycle began in the year 2020, and in May of that year the “rates were cut 13.3 per cent to Rs 39,678.47 per kiloliter (Rs 39.67 per liter)” according to the Economic Times. With this the steepest cut in the country’s history, we can easily see the extreme volatility that the ATF price can experience, which is usually the same volatility of oil prices since they are closely related to each other.
Although the ATF price is subject to high volatility, public companies like Indian Oil Corp do not always revise ATF prices. Even after the government deregulated petrol and diesel prices, the companies have sometimes frozen and even cut them for reasons that are not clear. An example of this was the 19-day price freeze on petrol and diesel ahead of the Karnataka polls in May 2018 despite international fuel prices going up by nearly $5 a barrel. Apparently, a rate reduction or freezing rate like this is the same tool used to avoid passing hikes to consumers.
However, some market analysts believe there are other reasons since there have been cases when volatility has not stopped both public and private companies to pass everything on to the airlines.
As you could see, the name of airplane fuel mainly depends on its composition and grade. However, the price depends on different aspects.
Considering all the above, we could conclude that prices really depend a lot on the petrol market. The higher the petrol price becomes, the more expensive it is to produce the fuels, and therefore, the more expensive it will be for the consumers. In the case of jet fuel, the consumers are mainly the airlines, which then try to find a way to pass on those higher costs to their customers, the passengers.
Living in an industry that has been hit hard recently, Indian airlines are finding it difficult to keep in business. India is 85 percent dependent on imports to meet its oil needs, and the current global situation has disrupted the market. Officials across airlines say the aviation ministry should now automatically raise domestic fare caps as a measure to compensate for the effects of rising oil prices. But this could also hurt their business if people decide not to pay for higher fares and they start losing passengers.
The road ahead seems a difficult one, and we can do nothing but hope for the industry to find a solution. So far, airlines have been resilient and have overcome the hardest of times, so there is no reason to believe this time will be different.
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