State-owned oil retailers reduced the price of aviation turbine fuel (ATF) by 7.3% on 1 January 2026, while raising the rate of commercial liquefied petroleum gas (LPG) for hotels and restaurants by ₹111 per 19-kg cylinder. The mixed revision reflects global market movements and will have differing effects across transport and hospitality sectors.
India ATF price cut eases costs for carriers
In Delhi, ATF was cut by ₹7,353.75 per kilolitre to ₹92,323.02 per kl, following three earlier monthly increases. The latest reduction offsets more than two thirds of the cumulative rise since 1 October 2025, when prices began climbing. Mumbai, Chennai and Kolkata saw ATF set at ₹86,352.19 per kl, ₹95,770 per kl and ₹95,378.02 per kl respectively. Local levies mean retail rates vary by city.
The fall in jet fuel prices should provide immediate relief to airlines, for which fuel typically accounts for about 40% of operating costs. Analysts expect carriers to welcome the easing in input costs, although no immediate comment was available from airline operators on the impact of the revision.
Commercial LPG hike tightens margins for hospitality
Commercial LPG used by hotels and restaurants was raised sharply, with the Delhi price of a 19-kg cylinder now at ₹1,691.50. The increase follows two rounds of reductions in previous months, and places commercial LPG at its highest level since June 2025. Market sources said winter heating demand had pushed LPG rates in international markets, feeding through to domestic commercial pricing.
Domestic LPG for household kitchens remained unchanged at ₹853 for a 14.2-kg cylinder, following a substantial rise of ₹50 in April 2025. The divergence between commercial and domestic pricing will be felt differently across end consumers, since businesses face direct increases in input costs that may be passed on to customers.
Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum adjust ATF and LPG prices on the first day of each month, tracking international benchmark rates and the rupee exchange rate. While oil prices have moderated over the past month, seasonal factors such as heating demand have supported LPG prices globally.
Petrol and diesel prices remain frozen after a ₹2 per litre reduction in March 2025. As of 1 January 2026, petrol in Delhi costs ₹94.72 per litre and diesel ₹87.62 per litre. The continued stability in road fuel prices contrasts with the volatility seen in aviation and commercial LPG markets.
Overall, the simultaneous ATF cut and commercial LPG hike underscore the uneven impact of global energy trends on different domestic sectors. Airlines may gain short-term breathing space as jet fuel costs fall, while the hospitality sector faces higher energy bills that could squeeze margins or translate into higher prices for consumers.
Key Takeaways:
- India ATF price cut of 7.3% will ease operating costs for airlines, where fuel accounts for nearly 40% of expenses.
- Commercial LPG for hotels and restaurants rises by ₹111 to ₹1,691.50 per 19-kg cylinder in Delhi, the highest since June 2025.
- ATF reductions neutralise over two thirds of the rise recorded since 1 October 2025, with city-specific prices varying due to local taxes.
- Domestic LPG remains unchanged at ₹853 for a 14.2-kg cylinder while petrol and diesel prices stay frozen.
