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ATF prices cut; fares may come down

Some relief: Will the cut in ATF prices lead to reduction in air fares is the question upper most in the mind of passengers now.

NEW DELHI: The State-owned oil marketing companies on Sunday slashed the price of aviation turbine fuel (ATF) by over 16 per cent, in keeping with the softening trend in the global oil market. The reduction in the non-administered price of jet fuel by the OMCs works out to a steep cut, on an average, of Rs 11,784 a kilolitre -- the single biggest cut in recent times.

With effect from the midnight of August 31/ September 1, ATF prices in Delhi – the country’s second busiest airport (IGI) -- would stand reduced by Rs. 11.378.19 a kilolitre to Rs. 59,650.07 per kl for domestic carriers. Likewise, the price of the jet fuel in Mumbai is to cheaper by Rs. 11,838.75 at Rs. 61,834.81 per kl. For international airlines, which are not liable to pay local taxes, the price reduction works out to about $ 205 a kl.

According to the Indian Oil Corporation (IOC), the OMCs have done their bit by passing on each penny of the reduction in prices of the ATF in the international market. “The sharp fall in the ATF prices is on account of the fall in prices of jet fuel in international market. We have always believed in passing on the benefit [of lower prices] to consumers,” an IOC official said.

The sharp reduction in the ATF prices is expected to put pressure on all airlines to cut their fares accordingly. Most of the airlines, it may be recalled, had hiked their fares following the June 1 increase in jet fuel prices by more than 18 per cent, or by about Rs. 10,839.16 per kl. However, the airfares were not scaled down when the ATF prices were reduced by over Rs 3,000 a kl. on June 5.

Now it is time for some cheer for air travellers as the drastic cut in ATF prices is likely to result in some savings in fares at a later stage as domestic carriers have indicated that a revision in fares is not being worked out immediately.

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