New Delhi: Domestic airlines will have to wait for at least three months before any reduction in jet fuel prices, their biggest expense, civil aviation minister Praful Patel said on Tuesday.
Prime Minister Manmohan Singh last week asked for the formation of a group of ministers (GoM) to look into rationalizing jet fuel prices.
Airlines want the state tax on jet fuel, which tops 30% in some states, to be reduced to a uniform 4%. Patel said it will take at least three months for some movement on the issue.
“It can’t be open-ended (timeline for an outcome),” said Patel, speaking in an editorial roundtable organized by the Hindustan Times, published by HT Media Ltd, which also publishes Mint.
Non-committal: Civil aviation minister Praful Patel. Raj K Raj / HT
On whether a final negotiated view could include a uniform 12% or 18% sales tax, he said it was too early to comment given that the issue will now be debated in the GoM, which includes Patel.
“Our cost of fuel, especially some variable costs, are much higher here. But that not withstanding, the pain (for the airline industry) is universal.”
On Air India, run by National Aviation Co. of India Ltd, Patel said the national carrier will not be privatized.
“The government has already decided that we don’t want to privatize Air India... Maybe we will offload some equity like other PSUs (public sector units),” he said.
The minister added that given the current slowdown in the airline industry, even private carriers could not hope to sell stake to international carriers.
Vijay Mallya-led Kingfisher Airlines Ltd, India’s largest private airline by passengers, has favoured a relaxation of rules regarding investments by foreign carriers, while Naresh Goyal-promoted Jet Airways (India) Ltd has echoed Patel’s sentiment.