Jet fuel prices surge over 100% in a month to $197 per barrel

Jet fuel prices have more than doubled over the past month, intensifying cost pressures on airlines globally and raising concerns of higher airfares in the weeks ahead.

According to the latest data from the International Air Transport Association (IATA), global jet fuel prices have surged to $197 per barrel as of March 20, marking a rise of over 100 per cent compared to late February levels.

The sharp rally began in the end of February, when prices were hovering below the $100 per barrel mark (around $95.5 per barrel). In just a few weeks, the market witnessed an unprecedented spike, including a dramatic jump of nearly 60 per cent in early March alone.

Prices have continued to climb steadily since, registering double-digit weekly gains and reflecting a sustained upward momentum rather than a one-off fluctuation.

A key driver of this surge is the widening gap between crude oil and refined fuel prices. While Brent crude is currently trading near $110 per barrel, jet fuel prices are significantly higher, pushing the crack spread, a measure of refining margins to elevated levels. This indicates that the increase is being driven not just by crude oil costs, but also by tightness in refining capacity and supply of aviation fuel.

Regional trends show that Europe and Africa are facing the highest jet fuel prices, exceeding $210 per barrel in some markets, while North America remains relatively lower due to stronger refining capacity. However, the upward trend is consistent across all regions, underscoring a global supply-side strain.

For airlines, this comes at a challenging time. Fuel typically accounts for up to a third of operating expenses, and such a steep increase in a short span is likely to erode margins significantly. Carriers may respond by adjusting ticket prices, introducing or increasing fuel surcharges, and focusing on operational efficiency to manage costs.

The rapid escalation in jet fuel prices signals renewed turbulence for the aviation sector, which had only recently stabilised post-pandemic. If the trend persists, both airlines and passengers may need to brace for a period of elevated travel costs and tighter capacity across key routes.