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Aviation stocks tanked by over four per cent as oil marketing companies increased fuel prices by more than seven per cent. Shares of Jet Airways and SpiceJet fell after State-run oil marketing companies raised jet fuel prices.
Jet Airways shares closed at Rs 338.40, down 4.47 per cent from the previous close, on the BSE on Monday. Shares of SpiceJet fell 4.74 per cent and closed at Rs 30.15. However, Kingfisher Airlines stock was up 2.81 per cent at Rs 9.16.
Aviation analysts say that jet fuel constitutes almost half of an airline’s operating costs, compared with 20-25 per cent globally. This is on account of the high taxes on Aviation Turbine Fuel levied by different States, which is anywhere between four and 30 per cent. From September 1, oil marketers increased jet fuel price by a record 7.6 per cent to all-time high of Rs 72,282 per kilolitre in Delhi, Rs 79,590 in Kolkata, Rs 72,831 in Mumbai and Rs 76,350 in Chennai.
The price hike comes on the back of firming international oil rates and a depreciation of the rupee against the US dollar.
A recent report by International Air Transport Association said, “Jet fuel prices increased further in August, returning to the highs seen throughout 2011, after some respite during the second quarter.
“Crude oil prices were pushed higher by supply concerns and misplaced optimism about economic growth.”
>nivedita.ganguly@thehindu.co.in
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