Oil cos cut aviation turbine prices
With softening international crude oil prices, oil cos have cut aviation turbine fuel prices by about 8%.
By Piyush Pandey, TNN |
MUMBAI: With the softening crude oil prices in the international markets, state-owned oil companies have cut aviation turbine fuel (ATF) prices by around 8%. The revised prices will be effective from Sunday.
The prices of jet fuel have been ruling at an all-time high since the past eight months and were adding to the losses of ailing airline companies.
However, airlines said they are unlikely to pass on the benefit of lower fuel rates to consumers immediately. Most domestic carriers are charging a fuel surcharge of between Rs 350 to Rs 650 on every air-ticket. The surcharge for international tickets is much higher, depending on the distance travelled.
ATF constitutes 45% of the operating cost for the low cost carriers and around 35% for the full service carriers.
An Indian Oil Corporation (IOC) official said , “We have decided to reduce the ATF prices by around 8% for the domestic and international airlines.”
Unlike other transportation fuels, the prices of ATF are free and are fixed by the companies every month, based on the average international prices in the preceding one month period.
The average reduction in the ATF prices is by around Rs 3,700 per KL. The differences in prices in different metros are because of the different tax levied by the state governments. Sales tax on ATF ranges from 8% to 24% across different states.
The rates are different for international airlines, since they do not have to pay sales tax on the product. Foreign carriers will able to lift ATF at $ 675 per KL in Delhi, $704 in Kolkata, $670 in Mumbai and $662 in Chennai with effect from October 1.
The average reduction in ATF prices for the international carriers is almost by $52 per KL. However, the reduced ATF prices are not likely to help air-travellers since the industry is in no mood to cut fares, say observers. Fuel surcharges were raised to Rs 600 only this month.
The prices of jet fuel have been ruling at an all-time high since the past eight months and were adding to the losses of ailing airline companies.
However, airlines said they are unlikely to pass on the benefit of lower fuel rates to consumers immediately. Most domestic carriers are charging a fuel surcharge of between Rs 350 to Rs 650 on every air-ticket. The surcharge for international tickets is much higher, depending on the distance travelled.
ATF constitutes 45% of the operating cost for the low cost carriers and around 35% for the full service carriers.
An Indian Oil Corporation (IOC) official said , “We have decided to reduce the ATF prices by around 8% for the domestic and international airlines.”
Unlike other transportation fuels, the prices of ATF are free and are fixed by the companies every month, based on the average international prices in the preceding one month period.
ADVERTISEMENT
The price including the sales tax for domestic airlines is now Rs 40,304 per kilo litre (KL) in Delhi, Rs 45,838 in Kolkata, Rs 41,704 in Mumbai and Rs 43,928 in Chennai with effect from October 1. The current price of ATF in Delhi is Rs 43,900 per KL in Delhi, Rs 49,610 in Kolkata, Rs 45,530 in Mumbai and Rs 47,821 in Chennai. The average reduction in the ATF prices is by around Rs 3,700 per KL. The differences in prices in different metros are because of the different tax levied by the state governments. Sales tax on ATF ranges from 8% to 24% across different states.
The rates are different for international airlines, since they do not have to pay sales tax on the product. Foreign carriers will able to lift ATF at $ 675 per KL in Delhi, $704 in Kolkata, $670 in Mumbai and $662 in Chennai with effect from October 1.
The average reduction in ATF prices for the international carriers is almost by $52 per KL. However, the reduced ATF prices are not likely to help air-travellers since the industry is in no mood to cut fares, say observers. Fuel surcharges were raised to Rs 600 only this month.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
