Sunday, November 16, 2008

Oil companies slash ATF prices

Amid falling international crude oil prices, state-run oil marketing companies (OMCs) on Saturday announced slashing of Aviation Turbine Fuel (ATF) prices by over 12 per cent, or Rs. 5,580 per kilolitre, in the first fortnight of the month.

However, there was little cheer for air travellers as airlines gave little indication of the passing on the benefit by reducing the prices of air tickets.

With this reduction, the ATF prices are now on a par with the levels that prevailed in September 2007.

The ATF price in Delhi was cut by Rs. 5,585.19 to Rs. 39,380.51 per kl with effect from midnight on Saturday, according to official sources. This is the fifth cut in ATF prices since August when the prices rose to an all-time high of Rs. 71,028.26 .

This is the third cut this month — the first was the monthly reduction, which was followed by a lowering of prices due to abolition of customs duty on the fuel.

Oil companies now fix rates every 15 days instead of the earlier practice of revising the prices based on the average oil price in the preceding month.

The ATF price in Mumbai will come down to Rs. 40,687.42 from Rs. 46,518.85 per kl.

The OMCs had reduced ATF prices to Rs. 48,656.59 on November 1 and then to Rs. 46,518.85 on November 4.

The airlines are maintaining they are studying the situation and will take a decision later.

The Finance Ministry recently abolished the 5 per cent import duty on ATF. The same day, Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited cut jet fuel prices in Delhi by Rs. 9,429.87 to Rs. 47,017.93 per kl, in line with the falling international oil prices.

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