Jet fuel prices were reduced by Rs 5 per litre on Wednesday, bringing aviation turbine fuel (ATF) rates down to around Rs 110 per litre in Delhi. The first cut since the West Asia conflict triggered a record surge in aviation fuel prices comes as international crude oil prices soften, offering relief to airlines grappling with elevated operating costs.
The Centre reduced the price of aviation turbine fuel (ATF) by Rs 5 per litre from July 1, marking the first decline in jet fuel rates since the West Asia crisis drove prices to record highs.
Following the latest revision, ATF now costs around Rs 110 per litre in Delhi, according to industry sources. The reduction comes amid easing international crude oil prices and improving market sentiment after concerns over supply disruptions subsided.
Aviation fuel accounts for nearly 35-40 per cent of an airline's operating expenses, making fluctuations in ATF prices a key factor influencing airline profitability and, potentially, airfares. However, airlines have not yet indicated whether the latest reduction will translate into lower ticket prices.
ATF prices in India are revised twice every month by state-owned oil marketing companies based on international benchmark prices and the rupee-dollar exchange rate.
The price revision coincides with the Centre's latest fortnightly review of export duties on petroleum products, effective July 1. Under the revised rates, petrol exports will attract a duty of Rs 4 per litre, diesel exports Rs 8.5 per litre, while the Special Additional Excise Duty (SAED) on ATF exports has been fixed at Rs 7.5 per litre. The Ministry of Finance said the Road and Infrastructure Cess on these exports remains nil.
The government reviews export duties every two weeks based on the average global prices of crude oil, petrol, diesel and ATF during the preceding fortnight. The previous revision was carried out on June 16.
The Centre has also expanded the list of countries exempt from export duties. In addition to Nepal, Bhutan, Bangladesh and Sri Lanka, public sector oil companies exporting petrol, diesel and ATF to Mauritius and the Maldives will now also be exempt from the levy.
There is no change in excise duties on petrol and diesel sold in the domestic market, meaning retail fuel prices for consumers remain unaffected by the latest revision.