Respite for flyers? ATF prices cut by 4% on account of fall in international oil prices
2 min read . Updated: 01 Mar 2023, 01:43 PM IST
Premium- With the latest cut in jet fuel prices, consumers are expected to see some relief
The price of aviation turbine fuel (ATF) in India was revised lower in line with softening international oil prices, while petrol and diesel rates remained unchanged for this month. Jet fuel prices have been cut by 4 per cent or ₹4,606.50 per kilolitre to ₹1,07,750.27 per kilolitre.
In the national capital, ATF prices have been slashed by ₹4,606 per kilolitre, or 4.09 per cent, to ₹107,750.27 per kl.
In Mumbai and Chennai, the prices will be ₹1,06,695.61 and ₹1,12,497.99. In Kolkata, it will be ₹1,15,091.33 per kl, as per the Indian Oil Corporation website.
Would airfares go down?
With the latest cut in jet fuel prices, consumers are expected to see some relief. ATF prices make up about 40 per cent of the operating cost of an airline.
Last month, the government cut windfall profit tax on export of diesel and ATF to their lowest. The government reduced the tax on overseas shipments of ATF to ₹1.50 a litre from ₹6 a litre.
International oil prices have softened since on fears of recession in major economies.
On Wednesday, oil rose as data showing a strong recovery in Chinese factory activity reinforced the outlook for energy demand in the world’s biggest crude importer and offset concern about rising US inventories.
West Texas Intermediate advanced toward $78 a barrel, erasing an earlier intraday drop.
Crude remains lower in 2023 as the prospect of tighter US monetary policy and rising inventories have so far outweighed optimism that Chinese demand will strengthen as activity picks up.
Russian flows are also in focus as western sanctions and bans linked to the war in Ukraine tighten. Although Moscow has largely managed to keep exports going by finding new buyers, there are signs of friction in markets including India, a key outlet for Russian crude.
Ravindra Rao, head of commodities research at Kotak Securities Ltd, said: "Prices might gain support from signs of an economic rebound from the world’s largest oil importer.
“The nation’s crude consumption is expected to hit pre-pandemic highs and might contribute to most of the global oil demand in 2023," Rao added.
Readers may note that ATF prices are revised on the 1st and 16th of every month based on rates of benchmark international oil rates in the previous fortnight.