Oil companies likely to cut ATF cost by Rs 350/kl

Moneycontrol Bureau

State-run oil marketing companies are likely to cut aviation turbine fuel(ATF) cost by around Rs 350 per kilolitre, say oil ministry sources. There could be another sharp ATF price cut on July 16 if oil remains at the same level. Oil marketing companies like Bharat Petroleum, Hindustan Petroleum and Indian Oil revise ATF price every fortnight depending on the global crude oil prices.

Currently ATF is being sold at over Rs 51,000 a kilolitre in Mumbai and Delhi which is nearly 70% higher then what the commodity costs in Malaysia or any Middle East and Gulf regions.

Airlines like Jet Airways, Kingfisher Airlines and SpiceJet along with other carriers are collectively lobbying to get a uniform sales tax structure pan India  Andhra Pradesh, Kerala and Rajasthan are the only states which pay 4% tax on the commodity. Currently, Delhi pays around 20% tax on ATF, Mumbai pays 24%. Sales tax on ATF varies from 4% to as high as 34% in various states.

Meanwhile, after announcing the Q4 results of FY11, airlines had said their profits had dented over 20% due to the spiraling fuel cost and airlines could not pass on the burden to end-consumers in the form of higher fares.