Millennium Post

After 2 months of increase, jet fuel price cut by 5.5%

Jet fuel (ATF) prices were on Monday cut by a steep 5.5 per cent, reversing the rising trend of past two months. Aviation Turbine Fuel, or ATF, price at T3 terminal in Delhi was cut by about Rs 3,885 per kilolitre (kl), or 5.5 per cent, to Rs 66,196 per kl from Monday, according to Indian Oil Corp, the nation's largest fuel retailer. The reduction comes on back of a 2 per cent (Rs 1,324.84 per kl) increase in price from 1 February  and a 3.8 per cent (Rs 2,519.83 per kl) hike in rates from 1 March.

In Mumbai, jet fuel will cost Rs 68,332 per kl as against Rs 72,451.79 per kl previously. Rates at different airports vary because of differential in local sales tax or VAT. Kolkata would see price cut of Rs 3,066 to Rs 76,172 per kl, while it will cost Rs 71,986 in Chennai as against Rs 76,239.44 per kl previously.Jet fuel constitutes over 40 per cent of an airline's operating costs and the reduction in prices will ease the burden of the cash-strapped airlines. No immediate comments were available from the airlines on the impact of the price reduction on passenger fares.

The three fuel retailers —Indian Oil Corp oration Ltd, Hindustan Petroleum and Bharat Petroleum — revise jet fuel prices on the 1st of every month, based on the average international price in the preceding month.

Meanwhile , the oil marketing companies (OMCs) on Monday also reduced the price of non-subsidised cooking gas (LPG) by Rs 3 per cylinder in line with fall in international rates. A 14.2-kg LPG cylinder that consumers will have to buy after they exhaust their enhanced quota of 9 subsidised bottles in a year, will cost Rs 901.50 from now onwards, according to Indian Oil Corp oration Ltd.

The government had in September last year fixed a quota of six subsidised LPG cylinders per household in a year. This was increased to 9 cylinders in January. Any requirement over and above this entitlement has to be bought at market price.

In the immediate aftermath of the September decision, oil PSUs had hiked price of non-subsidised LPG by Rs 26.50 per cylinder from November 1 but had to roll it back within hours as the government did not want to compound the backlash it was already facing for limiting supply of subsidised LPG to just six cylinders per household in a year.

But soon after the decision to raise the supply of LPG at subsidised rate of Rs 410.50 to 9 cylinders per household in a year from six, the rate for non-subsidised gas was hiked by Rs 46.50 per 14.2-kg cylinder to Rs 942 in Delhi from 18 January.
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