BT India@100 summit: ATF prices declined by 12%, hope to see this trend continuing, says Jyotiraditya Scindia 

Civil aviation minister Jyotiraditya Scindia said that aviation turbine fuel (ATF) or jet fuel prices have gone down by a whopping 12 per cent in the last two weeks, while adding that he hopes to see this trend continuing.  

Commenting on the heavy taxations on ATF that airlines have been battling, Scindia said at the Business Today's India @ 100 summit, “ATF is close to about 40 per cent of the cost structure of an airline... Fortunately, ATF prices have declined by 12 per cent in the last two weeks down to Rs 1,16,000 per kl and I hope to see that trend continuing.”  

He added ATF has gone from around Rs 53,000 per kl to Rs 1,41,000 per kl in the last two years and put tremendous pressure on airlines. The minister also said that they looked at how to structure the cost composition of the airline.  

He underscored, “One of the first thing I did when I took charge [as civil aviation minister], when I understood what the cost structure of our sector is we looked at how are going to lay this cost structure.”  

The minister further said, “[There were] two ways that we could do it—the first was to ensure that ATF comes under GST but that as we all know is not a step that we can just take with a government order. It has to go to GST Council, there has to be a lot of debate, there has to be a lot of discussion.” 

He also talked about approaching state governments on the matter, while adding that 12 states charged 1 per cent to 4 per cent value added tax (VAT) on ATF but 26 states and union territories charged VAT on ATF anywhere between 20 per cent to 30 per cent.  

He recounted his meeting with the concerned state authorities and mentioned, “I coordinated, spoke, requested and pleaded with every chief minister of 22 states. Tried to make them understand that if you lower taxes, you will actually increase revenue.” He also told them that lower taxes on ATF imply higher connectivity as airlines will be incentivised to add more routes to states having lower taxes on aviation fuel.  

Talking about connectivity, Scindia also underscored, “The new growth areas in aviation are going to be from regional spaces. While you concentrate on international connectivity and the 6 metros, also focus on last-mile connectivity.” 

Also read: India@100 Summit: 'My hands quite full with or without Air India,' says Civil Aviation Minister Scindia