Qantas will raise domestic and international airfares by as much as 3.5 per cent early next month to offset the soaring cost of jet fuel prices.

The decision comes as the price of oil today hit a record of $US119.93 a barrel due to a strike closing a major pipeline in Britain and renewed violence in resource-rich Nigeria.

Domestic fares across all classes of flights on Qantas and its regional subsidiary, QantasLink, will rise by about 3.5 per cent from May 9, while the price of international tickets will increase by 3 per cent.

Qantas's low-cost offshoot, Jetstar, is also likely to increase fares as it undertakes a review of prices.

A rise in Qantas's fares sold outside Australia is also under review.

Qantas's chief executive, Geoff Dixon, said the airline was raising fares, making cutbacks to "non-essential" expenditure and instituting a hiring freeze to minimise the impact of the surging jet fuel prices.

"An increase in base fares is now necessary to partially bridge the widening gap between the actual increase in the cost of fuel and the amount we offset through surcharges or non-fuel cost improvements," he said in a statement today.

"We will continue to monitor fare and surcharge levels and review our network and schedule to optimise capacity."

The country's second-largest airline, Virgin Blue, is also set to raise one-way fares by up to $12 next month because of the high fuel prices. Another option the airline has been considering is to introduce a further fuel surcharge because of its inability to keep absorbing the fuel costs.

Qantas also announced today that it would suspend the buying back of its shares, which it described as "prudent" in light of the fuel price volatility.