Oil cos slash ATF prices by 11%

Oil cos slash ATF prices by 11%

New Delhi: Domestic oil marketing companies have reduced the price of jet fuel by 11% this fortnight to Rs32,691.28 a kilolitre in New Delhi -- the seventh consecutive cut since August when prices touched a record Rs71,028.26 per kilolitre.

The new price will come into effect from midnight Monday, according to oil retailer IndianOil Corp. Ltd or IOC’s website.

In Mumbai, home to the country’s busiest airport, ATF will cost 3,719.46 per kl from midnight Monday (the old price was 38,103.19; the old price in New Delhi was 36899.65).

Since last month, three Indian state-run oil firms IOC, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd have started revising jet fuel prices twice a month -- on the first and 16th -- based on the average imported price in the preceding fortnight.

The three firms had earlier this month cut jet fuel prices on an average by Rs2,480 per kl.

It was not immediately clear if airline companies would reduce ticket prices. When contacted, a Kingfisher Airlines Ltd spokesperson said the airline’s management is evaluating the latest reduction in the jet fuel prices and will decide its future course of action shortly. A Jet Airways (India) Ltd spokewoman said that her airline has not taken a decision on passing the benefits of reduction in jet fuel prices to passengers.

Airlines have already reduced a so-called fuel surcharge by Rs400 after the state-owned carrier Air India, run by National Aviation Co. of India Ltd, announced a cut in prices soon after new fuel prices were announced in the first half of December.

Jet Airways, for example, charges Rs1,950 now as surcharge for shorthaul flights instead of Rs2,350 earlier, and Rs2,700 on long-haul ones, down from Rs3,100.

Though there is some room to reduce airfares, “there will be reluctance to pass it on to the customers because the airiness are trying recoup their losses," said Kapil Arora, aviation analyst with audit and consultancy firm Ernst & Young. Low cost carrier SpiceJet Ltd chief executive Sanjay Agarwal told Mint in an interview on 1 December, he expected his airline “to make a little bit of money in December" at jet fuel prices then.

PTI contributed to this story.