India's flagship international carrier, Air India, has raised its jet fuel hedging limit to 75,000 barrels per day from 30,000 bpd to guard against volatile fuel prices, the company said.

"The board has raised the limit to give us more flexibility," S. Venkat, company secretary, said.

The company's board also set a hedging limit of 750,000 barrels a quarter.

The state-owned carrier's fuel bill in 2005/06 was 31.34 billion rupees (USD$682 million), nearly a third of its total cost. This year, oil prices soared to a peak of USD$78.40 a barrel in July, but were now trading at about USD$61.

Aviation fuel was at about USD$77.11 a barrel at the benchmark Singapore index.

Air India was the first Indian airline to hedge its jet fuel costs in March this year through a combination of swaps, options and collars.