Construction Industry News
Domestic airlines in India have called for rationalization of aviation fuel taxes in an effort to curb the spike in fuel prices. Due to the high crude oil prices, Oil Marketing Companies (OMCs) have increased the prices of aviation turbine fuel (ATF) to more than Rs 1 lakh per kiloliter (kl).
The price of jet fuel in the national capital was increased by 18.32% to Rs 1,10,666.29 per kiloliter (kl) from Rs 93,530.66 per kl.
The price was raised to Rs 1,14,979.70, Rs 1,09,119.83 and Rs 1,14,133.73 per kl in the other metro cities of Kolkata, Mumbai and Chennai respectively.
The increase came as the price of crude oil remained high as a result of the crisis between Russia and Ukraine. Jet fuel prices are updated every two weeks by fuel retailers.
As a result of the ongoing conflict in Europe, crude oil prices have risen to a seven-year high of nearly $140 a barrel, according to Ronojoy Dutta, IndiGo's Full-time Director and Chief Executive Officer. This has resulted in a price increase of more than 50% since January 2022, including the current increase of 18%.
Such measures are needed now more than ever, according to Dutta, to offset the cost increase and make flying both feasible for airlines and affordable for consumers.
Domestic ATF prices in India are derived from international fuel prices denominated in US dollars, making ATF prices sensitive to exchange rate fluctuations. In particular, the rupee has recently depreciated against the US dollar, leading to price gains. Due to the high tax levels, ATF prices are significantly higher than international benchmarks.
The industry has pushed for fuel type to be included in the Goods and Services Tax (GST), similar to how bunker diesel used in the shipping industry has been.
