Senior executives from the domestic carriers told Moneycontrol they negotiated for lower jet fuel prices as part of their yearly contracts with oil marketing companies following a nearly 30 percent fall in the price of crude, from around $95 a barrel in November 2024 to $60 a barrel in March 2025.
As part of the proposals being considered by the Delhi government, the state might see VAT on ATF being cut to 10 percent from the current 25 percent.
Airlines have raised concerns that setting a mandatory SAF blending target for domestic flights would led to a significant rise in costs for the carriers, which would translate to a steep rise in ticket prices for passengers.
Globally, the aviation sector contributes to around 12 per cent of carbon dioxide emissions from transportation. SAF could help reduce these emissions, as compared to conventional jet fuel.
The rating agency’s outlook on the Indian aviation industry is Stable on the back on the back of the fast-paced recovery in domestic passenger traffic
Dip in the number of weekly flights is likely to aid passenger load factor of the aviation sector amid a rise in traffic.
The government is looking to make it mandatory for airlines in India to use sustainable aviation fuels, Rajiv Bansal, secretary in the ministry of civil aviation, said while addressing IATA Aviation Energy Forum
The export tax on petroleum crude has been increased from Rs 17,000 to Rs 17,750 per tonne
The price of aviation turbine fuel (ATF) — the fuel that helps aeroplanes fly — was hiked by Rs 277.5 per kilolitre, or 0.2 per cent, to Rs 1,13,202.33 per kl (Rs 113.2 per litre) in the national capital
It is the state governments, who levy VAT on aviation fuel, who are opposing the move in the GST council
The increase in rates comes on back of two rounds of price cuts seen in December that reflected a drop in international oil prices during the second half of November and mid-December.
The reduction will come into effect from midnight today (Monday).
"I have written a letter to all chief ministers in the country to reduce the Value Added Tax (VAT) on ATF (aviation turbine fuel). There are eight-nine states where it is in the range of one to four per cent, and that has resulted in 15 per cent increase in flights from those states," the minister said.
Union Minister Hardeep Singh Puri said the ministry has decided to retain the permissible limit of flyers to 80 percent of the schedule as number of air passengers decline due to COVID-19 restrictions and imposition of compulsory RT-PCR test.
Aviation turbine fuel (ATF) price has been cut by Rs 6,812.62 per kilolitre, or 23.2 percent, to Rs 22,544.75 per kl in the national capital, according to a price notification by state-owned oil marketing companies.
State-owned oil firms cut aviation turbine fuel (ATF) price by Rs 6,687.75 per kilolitre (kl) or 11.76 percent, to Rs 50,171.26 per kl - the lowest since September 2017, according to a price notification of oil marketing companies.
This is the first increase in prices in four-months which has pushed rates to their highest level this year.
Under the existing structure, the fuels attract the Centre’s excise duty and a state’s value added tax
Going by what analysts say, the Udan scheme poses a plethora of challenges for airlines that have won bids in the country's ambitious regional connectivity scheme.
The cut in jet fuel taxes in Delhi is one of many steps to reduce fares, he said. The ministry is also mulling a reduction in service tax on flight tickets and decreasing the levy on airport charges and transaction charges.
Aviation turbine fuel (ATF) price was today hiked by a steep 8.6 per cent and subsidised LPG rate raised by Rs 2 per cylinder, the 8th increase in cooking gas price in seven months.
ATF or jet fuel price was hiked by Rs 1,881 per kilolitre (kl), or 3.7 percent, to Rs 48,379.63 per kl in Delhi. The reduction comes after two rounds of hikes, the last one being on November 1 by a steep 7.3 percent.
A subsidised 14.2-kg cylinder will now cost Rs 430.64 in Delhi as against Rs 428.59 previously, according to state-owned oil firms.
"India is a huge market ... Obviously we are a very large player globally in the aviation business, so it makes sense for us to be here," said Sashi Mukundan, regional president and India country head for BP .
Minister of State for Civil Aviation Jayant Sinha hoped these airports would start functioning when a scheme for regional connectivity takes off.