With international oil prices dipping to six years low, Jet fuel (ATF) prices were slashed by a steep 11.3% over the weekend. With this, price of aviation turbine fuel (ATF), or jet fuel, in Delhi was cut by Rs 5,909.9 per kilolitre, or 11.27%, to Rs 46,513.02 per kl.
Notably, the reduction which followed the steepest ever cut of Rs 7,520.52 per kl or 12.5% affected from January 1, has led to ATF becoming cheaper than even diesel. With the effective rate ATF costs Rs 46.51 per litre, while diesel still costs Rs 51.52 per litre. However, the prices of diesel and petrol were kept unchanged as per the fortnightly revision.
Traditionally, auto fuels being of lesser quality than ATF, should cost less, but four consecutive excise duty hikes since November -- totaling Rs 7.75 a litre on petrol and Rs 7.50 on diesel, have reversed this trend.
This development is definitely encouraging for Aviation industry which continues to reel under liquidity pressure since jet fuel constitutes over 40% of an airline's operating costs and the price cut will ease the financial burden of cash-strapped carriers. Notably, the latest cut marks seventh straight reduction in jet fuel rates since August.