OMCs hike commercial LPG by ₹62.50, ATF by ₹16/litre from October 1
Synopsis
Key Takeaways
State-owned oil marketing companies (OMCs) raised commercial LPG prices by ₹62.50 per 19-kg cylinder and aviation turbine fuel (ATF) rates by ₹16 per litre with effect from 1 October 2026, citing firming international benchmark prices and rupee-dollar exchange rate movements. The revisions follow a pattern of monthly adjustments that have seen both fuels swing sharply over the past several months.
ATF Price Rise and Its Airline Impact
ATF prices for domestic airlines have climbed to ₹137 per litre from ₹121 per litre — a ₹16 per litre jump in a single monthly revision. This follows an increase of ₹6.28 per litre (approximately 5.46%) in September and a ₹5 per litre hike in August. Notably, ATF accounts for up to 40% of an airline's operating costs, making it the single largest variable expense for Indian carriers. Three consecutive monthly increases will add meaningful pressure to airline margins, particularly for low-cost operators running tight cost structures.
Commercial LPG: A Volatile Few Months
The ₹62.50 October increase in commercial LPG follows a ₹9.50 rise in September, even as rates had been cut sharply — by ₹192 per 19-kg cylinder in August and ₹183.50 in July. The rollercoaster traces back further: commercial LPG prices had surged to a record high in June amid disruptions to global energy supplies, with rates rising by ₹1,373 per cylinder between February and June — from ₹1,740.50 to ₹3,113.50 — before the July-August corrections brought partial relief to hotels, restaurants, and small businesses that rely on commercial cylinders.
Domestic LPG and Petrol-Diesel Left Unchanged
Household cooking gas prices remain untouched at ₹942 per cylinder. Domestic LPG had previously risen by ₹89 per cylinder between March and June, linked to West Asia supply disruptions and elevated global energy prices. Petrol and diesel prices, which were last revised in May, also remain unchanged. The government has consistently shielded household fuel from the volatility hitting commercial and aviation segments.
Why Prices Are Moving and What Drives the Revisions
OMCs revise ATF and LPG prices on the first day of every month, with adjustments benchmarked to international crude and LPG prices as well as the prevailing rupee-dollar exchange rate. Final pump prices vary across states due to local levies, including VAT. The October revision reflects a tightening in global energy markets after the July-August demand-driven correction had provided temporary relief.
Who Bears the Brunt
The commercial LPG hike directly affects the hospitality sector — dhabas, restaurants, canteens, and caterers — which purchase the 19-kg commercial cylinder rather than the subsidised domestic variant. For airlines, the ATF increase lands during a period when carriers are already managing post-monsoon load-factor pressures. Industry bodies are likely to flag the cumulative cost impact, given that ATF alone has risen over ₹21 per litre across the August-October window.