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ATF price reduced by 12%; rates off their peak, would airfares go down?

ATF price update: This is only the third reduction in rates this year. Prices had peaked at  ₹141,232.87 per kl ( ₹141.23 per litre) in June.  (PTI)Premium
ATF price update: This is only the third reduction in rates this year. Prices had peaked at 141,232.87 per kl ( 141.23 per litre) in June.  (PTI)

  • ATF price update: This is only the third reduction in rates this year. Prices had peaked at 141,232.87 per kl ( 141.23 per litre) in June. Prior to that, prices were hiked by the steepest ever 16 per cent to catapult rates to an all-time

Jet fuel (ATF) prices on Monday were reduced by 12 per cent, reflecting a fall in international oil prices. Aviation turbine fuel (ATF) prices were cut by 12per cent, to 1,21,915.57 which was 138,147.93 per kl on 16 July in Delhi, a price notification of state-run fuel retailers showed.ATF prices are revised on the 1st and 16th of every month based on rates of benchmark international oil rates in the previous fortnight. There was no change in rates on July 1.

In Mumbai the price of ATF is 1,20,875.86 per kl,in Kolkata it is available at 1,28,425.21 per kl whereas the price of ATF per kl is 1,26,516.29 after the latest revision.

This is only the third reduction in rates this year. Prices had peaked at 141,232.87 per kl ( 141.23 per litre) in June. Prior to that, prices were hiked by the steepest ever 16 per cent to catapult rates to an all-time.

International oil prices have softened since on fears of recession in major economies. Oil prices are at pre-Ukraine war levels.

On June 16, the price of ATF -- the fuel that helps aeroplanes fly -- was increased by 19,757.13 per kl. That followed a marginal 1.3 per cent ( 1,563.97 per kl) cut in rate on June 1. But for the one-off decrease on June 1, ATF prices have been on the rise throughout 2022.

In all, rates have been increased 11 times since the start of the year. This has led to rates almost doubling in six months. With jet fuel making up almost 40 per cent of the operating cost of an airline, the increase in prices had resulted in a rise in the cost of flying. Now there has been a marginal relief.

Earlier due to rising aviation turbine fuel (ATF) prices due to Russia-Ukraine war are hurting the profitability of Indian carriers even as the passenger numbers are rising amid the receding pandemic.

In a report released last month, ratings agency ICRA said while the passenger numbers are recovering after the pandemic, elevated ATF (aviation turbine fuel) prices will continue to weigh on the earnings of Indian carriers in 2022-2023.

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