In yet another relief to the cash-strapped airlines, state-owned oil marketing companies on Saturday lowered the prices of aviation turbine fuel (ATF) by over 12% at Rs 5,580 per kilolitre. This is the fifth cut in a row in the prices of jet fuel by the oil companies in line with the falling international oil prices.
Following the cut, ATF price in Delhi will now stand at Rs 39,380.51 per kl with effect from Sunday, an IndianOil official, the nation?s largest fuel retailer, said. ATF price in Mumbai, home to the busiest airport in the country, will come down to Rs 40,687.42 per kl from Rs 46,518.85.
With this reduction, the ATF prices are now on par with levels that prevailed in September 2007. The first cut in ATF prices was implemented in September after the prices rose to all time high of Rs 71,028.26 per kl in August. Jet fuel prices have been slashed every month since then and in November alone, this is the third cut.
Oil companies had reduced ATF prices to Rs 48,656.59 per kilolitre on November 1 and then to Rs 46,518.85 a kilolitre on November 4, following abolishing of customs duty.
Prices have been lowered further because oil companies have now shifted to fixing rates in every 15 days instead of the previous practice of revising the prices based on average oil price in the preceding month.
Sources said the domestic airlines might now consider passing on the benefits to passengers in the form of cheaper fares. A review of the impact of the cut in ATF prices will be done by the airlines shortly, said an official.
Indian carriers that are facing a huge financial crunch have generally been reluctant to ease fares as they want to erase losses on their books first. Last month, the government allowed airlines to clear their dues of a mammoth Rs 2,962 crore in six monthly installments.