Jet fuel prices climb 10% in a month

The prices of jet fuel have risen for the third consecutive month, adding to cost pressures on Bangladesh’s airlines as the Bangladesh Energy Regulatory Commission (BERC) raised the price of aviation fuel again today.

The price of Jet A-1 for domestic flights has been increased to Tk 182.71 per litre, up from Tk 165.65 in September, according to the latest adjustment.

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For international flights, the price has risen to around $1.19 per litre, from $1.07 last month.

The latest increase means domestic jet fuel has become Tk 17.06, or 10.3 percent, costlier in a month.

More importantly for airlines, the latest move extends a steady recovery in fuel prices after they hit their lowest level in July following the rise that began after the US-Israel war on Iran started in late February.

The situation was highly volatile, with the regulatory body having to adjust prices twice in a month. The price peaked in April at Tk 227.08 per litre for domestic flights and $1.48 per litre for international flights.

Since then, the price had been declining until July, when the domestic price fell to Tk 130.99 per litre. It started rising again, reaching Tk 159.52 in August, Tk 165.65 in September and now Tk 182.71 in October.

That means the price has jumped 39.5 percent in three months.

The international price has followed almost the same trajectory, climbing from $0.85 per litre in July to $1.03 in August, $1.07 in September and $1.19 this month.

Before the war started, the price was Tk 94.93 per litre in January and February, respectively.

For airlines, the increase is significant because fuel is one of their largest operating costs. A sustained rise in jet fuel prices can squeeze margins and put pressure on airfares, particularly on routes where carriers have limited scope to absorb higher operating expenses.

BERC revises Jet A-1 prices based on international fuel prices, the exchange rate and shipping costs.

The fuel in Bangladesh is distributed exclusively by the state-owned Padma Oil Company Ltd under the Bangladesh Petroleum Corporation.