ATF price cut by 12 per cent; petrol, diesel prices untouched

PTI New Delhi | Updated on March 22, 2020 Published on March 22, 2020

The fortunes of domestic airlines are likely to be hit by the coronavirus outbreak, which has impacted global air travel.

Jet fuel prices were slashed by 12 per cent after oil firms reverted back to fortnightly revisions to pass on the benefit of falling crude oil prices, but rates of petrol and diesel remained unchanged for the seventh straight day to adjust the hike in excise duty.

State-owned oil firms cut aviation turbine fuel (ATF) price by ₹6,687.75 per kilolitre (kl) or 11.76 per cent, to ₹50,171.26 per kl - the lowest since September 2017, according to a price notification of oil marketing companies.

This is the third straight reduction in jet fuel rates since February, which make up for as much as 40 per cent of an airline’s running cost. In all, rates have fallen by ₹14,152.5 per kl or 22 per cent.

ATF prices, which already were lower than petrol and diesel, are now even lower than the rates of non-subsidised kerosene which comes for ₹58,818.07 per kl, according to price notification of oil firms.

Petrol price remained unchanged at ₹69.59 a litre in Delhi and diesel at ₹62.29 for the seventh day in a row, as oil firms adjusted the ₹3 per litre hike in excise duty on the two fuels effected by the government on March 13.

The excise duty hike, which would give the government ₹39,000 crore additional revenue, could have led to an increase in retail prices by ₹3 per litre each, but the oil companies adjusted them against the fall in international crude prices which halved to less than $30 per barrel.

ATF prices were deregulated in 2002, after which Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) revised rates on 1st and 16th of every month after accounting for changes in benchmark international prices and foreign exchange rates in the previous fortnight.

In November 2012, however, they decided to revise rates on 1st of every month.

But on Saturday, oil firms decided to revert to fortnightly revisions to pass on the benefit of falling international oil prices to the airlines.

Petrol and diesel prices, which are changed on a daily basis, however remained unchanged since March 16.

ATF price comes to ₹50.17 per litre and is cheaper than present rate of petrol and diesel.

The reduction in jet fuel prices comes as a relief to airline industry which has seen widespread flight cancellations and travel bans in view of the coronavirus pandemic.

Published on March 22, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.