NEW DELHI: Oil marketing companies have cut aviation turbine fuel (ATF) prices by 2.2% for this month as crude has cooled down a bit in past few days. Jet fuel prices were cut by Rs 3,084.9 per kilolitre (KL or 1,000 litres) to Rs 1,38,147.9 per kl, making this only the second reduction this year amid a spate of relentless hikes.
ATF for domestic flights is among the most expensive in India due to two reasons — high base price by oil marketing companies who are not able to raise politically sensitive petrol, diesel and cooking gas prices and thereby jet fuel sees a disproportionate increase. And then high central and state taxes on the base price leads to very expensive ATF. With airlines forced to hike airfares, the recovery in air traffic has stumbled due to the higher cost of flying.
Struggling to survive Indian carriers have long been requesting excise duty reduction on jet fuel and also that jet fuel be brought under GST so that they get the benefit of input tax credit. ATF prices have increased by more than 120% since June 2021. What has added to airlines’ burden is the weakening rupee as a majority of there costs like lease rentals and maintenance contracts are dollar-denominated.
