Fuel Price Relief in India: ATF Down 3%, Commercial LPG Cut by Rs 24
Consumers and businesses in India received some relief as fuel prices were reduced. Aviation Turbine Fuel (ATF) rates were slashed by 3%, marking the third consecutive monthly decrease due to softening international benchmark prices. Additionally, the price of commercial LPG (19-kg cylinder), primarily used by hotels and restaurants, was cut by Rs 24. These reductions reflect easing global oil and gas prices.
Unpacked:
The recent reductions are part of a trend, with petrol prices dropping by Rs. 5 per litre and diesel by Rs. 3 per litre in May 2025. This follows several months of price adjustments as global oil prices fluctuated, but these cuts are among the more significant recent reductions, providing broad relief to consumers and businesses.
Global oil and gas prices are currently easing due to a softening of international benchmark prices, influenced by factors such as increased supply, reduced demand, and stabilization in major economies. This trend has allowed oil marketing companies to pass on benefits to consumers through price cuts in India.
Airlines and businesses in the hospitality sector, such as hotels and restaurants, benefit most from these price reductions. Lower ATF prices help airlines reduce operating costs, potentially making air travel more affordable, while cheaper commercial LPG eases expenses for restaurants and food services.
Yes, industry bodies like the Confederation of Indian Industry (CII) have recommended lowering the central excise duty on petrol and diesel. They argue high fuel taxes contribute significantly to inflation and that lowering them would provide broader relief and support economic growth.