The price of jet fuel decreased by 2.2% on Saturday due to a drop in worldwide oil prices. This is the second and last rate reduction of the year.
Oil marketing companies (OMCs) reduced prices for aviation turbine fuel (ATF) and jet fuel by 2.2% on Saturday (July 16), indicating a drop in international oil prices. According to a notice from state-run retailers, OMCs have lowered the price of ATF from Rs 3,084.94 per kilolitre (kl) to Rs 1,38,147.93 per kilolitre.
This is just the second rate cut of the year. Last month, prices had reached an all-time high of 141,232.87 per kl (Rs 141.23 per litre). Every month on the 1st and 16th, the price of ATF is adjusted based on the previous two-weekly change in the international oil price index.
Prior to that, prices were hiked by the steepest ever 16 per cent to catapult rates to an all-time. International oil prices have softened since on fears of a recession in major economies. Oil prices are at pre-Ukraine war levels.
Before the reduction on Saturday, prices had already increased by 91% (Rs 67,210.46 per kilo) since the beginning of the year. Since the price of jet fuel accounts for over forty percent of an airline’s total operating costs, the rise in jet fuel prices has led to an increase in the cost of flying. Now there has been a small bit of relief.
This week, the Finance Ministry made it clear that ATF for international flights was not subject to the new excise duty that the Centre put on petroleum products. This was good news for domestic airlines that were refuelling planes for international flights because they wouldn’t have to pay an extra 11% excise duty on it.
On May 22, a reduction in excise tax by the government helped drop the price of petrol by Rs 8.69 per litre and diesel by Rs 7.05 per litre. Since April 6, however, the basic price has remained steady. The retail costs of gasoline, diesel, and household cooking gas are much below cost. Daily adjustments are made to gasoline and diesel prices depending on the worldwide market.
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