State-owned oil marketing companies have decreased aviation turbine fuel (ATF) prices by almost Rs 5 per litre, effective from Wednesday. The reduction comes after a drop in international crude oil prices due to reduced geopolitical tensions in West Asia. In Delhi, the price of jet fuel has been slashed to around Rs 110 per litre starting July 1.
The price cut is anticipated to reduce operational expenses for domestic carriers, with the actual savings dependent on individual airlines’ fuel procurement and hedging strategies. The decline in global crude oil prices in recent weeks, as tensions in West Asia eased and supply concerns diminished, offers relief to airlines, where fuel stands as the largest operating cost.
In June, the government set the basic price of aviation turbine fuel (ATF) for domestic airlines at Rs 86.32 per litre for up to three years under a new price stabilization scheme. This initiative aims to support airlines financially and maintain affordable passenger ticket prices. Airlines participating in the scheme will adhere to the fixed free-on-board (FOB) benchmark price, along with airport charges, oil company margins, and applicable taxes, resulting in a final selling price of about Rs 115 per litre in Delhi, Rs 114.50 in Mumbai, and Rs 139 in Chennai.
The government has also adjusted the windfall tax on petroleum product exports. As per the revised rates, the Special Additional Excise Duty (SAED) on petrol exports has been raised to Rs 4 per litre, while the export duty on diesel has been reduced to Rs 8.5 per litre and on ATF to Rs 7.5 per litre. However, there have been no changes in the existing excise duty on petrol and diesel sold in the domestic market.
