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NEW DELHI : Oil marketing companies reduced prices of aviation turbine fuel (ATF) by nearly 12% amid easing global oil prices.

Aviation turbine fuel (ATF) price was cut by 16,232.36 per kilolitre, or 11.75%, to 121,915.57 per kilolitre in the national capital, according update on the Indian Oil Corporation’s website.

This is the second cut in two weeks. ATF prices were last reduced by 3,084.94 per kilolitre on 16 July.

The ease in fuel prices lifted aviation stocks on Monday. Shares of SpiceJet rose 5.22% at 40.30 per share, while the shares of IndiGo and Jet Airways rose 1.11% and 1.5% to 1890.65 and 104.65 respectively on the BSE.

Reduction in ATF prices bode well for airlines as fuel cost account for around 40% of overall expenditure of airlines. ATF prices are revised on the twice a month, on 1st and 16th of every month.

The price of ATF had reached a record level of 141,232.87 per kilolitre on 16 June, after a record 16% increase in rates. Due to the geopolitical tensions involving Russia and Ukraine, ATF prices increased 11 times in 2022.

ATF prices have declined amid easing global crude oil prices which have been under pressure of late due to concerns of a global recession and fall in demand.

At the time of writing the article, the October contract of Brent on the Intercontinental Exchange was trading at $100.22 per barrel, lower by 3.61% from its previous close. The September contract of West Texas Intermediate (WTI) fell 5.02% to $93.67 per barrel.

In another development, the prices of commercial LPG cylinders were reduced. In the national capital price was reduced by 36 to 1,976.50 per 19-kg cylinder.

Commercial cylinders are used in restaurants and hotels and other business entities. This is the fourth reduction in commercial LPG rates since May. Commercial LPG prices have come down by 377.50 per 19-kg cylinder since May.

However, domestic LPG prices which directly affect the common man has not been revised. In the national capital, the 14.2-kg domestic LPG cylinder costs 1,053. OMCs had last increased the price of domestic cylinders by 50 across the four metros.

Petrol and diesel prices have remained unchanged for around 70 days now. In the national capital, petrol is at 96.72 per litre, and diesel is sold for 89.62 a litre.

Fuel prices including LPG play a major role in the country’s inflation. According to official data, the retail inflation in June inched down marginally to 7.01% in June from 7.04% in the previous month due to moderation in food inflation. The inflation rate, however, remained above the Reserve Bank of India’s upper tolerance limit of 6%.

The RBI in its latest monetary policy statement projected an inflation of 6.7% in FY23 on the assumption of a normal monsoon and average crude oil price (Indian basket) of $105 per barrel.

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