Jet Fuel Prices Slashed for Second Consecutive Month in October

In October, aviation turbine fuel (ATF) prices have been reduced for the second month in a row, as oil marketing companies adjust their rates. The price of jet fuel has dropped by nearly Rs.6,000 per kilolitre.

In Delhi, the cost of ATF has decreased to Rs.87,597.22 per kilolitre, down from Rs.93,480.22 per kilolitre, marking a reduction of Rs.5,883. Similarly, in Mumbai, the price has fallen to Rs.81,866.13 per kilolitre, a decrease of Rs.5,566.65 from Rs.87,432.78 per kilolitre. Chennai saw the largest price drop, with jet fuel now priced at Rs.90,964.43 per kilolitre, down from Rs.97,064.32 per kilolitre—a reduction of Rs.6,099.89.

This price adjustment is particularly significant for Indian airlines, as jet fuel constitutes about 40% of their operating expenses. Consequently, they are highly sensitive to fluctuations in fuel costs. The ATF prices are revised on the first day of each month, taking into account international benchmark rates and foreign exchange rates.

It remains uncertain whether the reduced cost of jet fuel will lead to lower air ticket prices.

In a related development, Tarun Kapoor, Advisor to the Prime Minister's Office, mentioned that the government is working to include aviation turbine fuel and natural gas under the Goods and Services Tax (GST) regime within this financial year. Discussions are ongoing, as this change has been a long-standing demand from various sectors, especially aviation and energy.

Currently, ATF and natural gas are not covered by the GST and are subject to varying state-level taxes, including excise duty and value-added tax (VAT), which can reach up to 30% in some states. Including these fuels under GST could streamline the tax structure and potentially lessen the financial burden on industries like airlines.

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