Oil companies cut jet fuel price by 4%

For the second fortnight in a row, state-owned oil companies on Tuesday cut jet fuel prices by about 4 per cent after international oil rates cooled off from a two-year high.

Oil companies reduced aviation turbine fuel (ATF) price by Rs 2,327.89 per kilolitre or 3.95 per cent, to Rs 56466.11 per kl in Delhi with effect from Tuesday midnight, an official of Indian Oil Corp, the nation's largest fuel retailer, said.

Jet fuel rates had been cut for the first time in eight months on May 16 when prices were reduced by 2.9 per cent.

In two reductions, ATF price have come down by Rs 4094 per kl this month.

The official said the basket of crude oil India buys has averaged less than $110 per barrel in the second fortnight of May which was taken into account for calculating the desired selling price of ATF from June 1. The average of Indian basket of crude oil was over $114 per barrel in the first fortnight and USD 118 per barrel in April.

ATF price in Mumbai, home to nation's busiest airport, were slashed to Rs 57166.96 per kl from Rs 59602 per kl.

The reductions this month have come after 14 successive hikes since October, 2010, when international crude oil prices started soaring.

The ATF price in Delhi on October 1, 2010 was Rs 40,728.52 per kl. The rates were increased by Rs 19,831.48 per kl, or 48.7 per cent till April 30, when last price hike was announced.

No comment could be immediately obtained from airline companies on the impact of the price reduction on passenger fares.

Fuel cost accounts for 40 per cent of the airlines' operating cost and rates vary from airport to airport depending upon the local sales tax.

IOC and its sister public sector retailers Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.