New Delhi: For the second time this month, state-owned oil companies on Friday hiked jet fuel, or ATF, price by 1.5 percent as falling rupee made oil imports costlier.
Aviation Turbine Fuel (ATF) price at Delhi's T3 airport was hiked by Rs 899 per kilolitre (kl), or 1.5 percent, to Rs 58,578 per kl with effect from midnight tonight, an official of Indian Oil Corp, the nation's largest fuel retailer, said.
IOC and other state retailers, Hindustan Petroleum and Bharat Petroleum, had on September 16 raised jet fuel price by 2.5 percent.
ATF in Mumbai, home to the nation's busiest airport, will cost Rs 907 per kl more at Rs 59,359 per kl from tomorrow as against the old price of Rs 58,452.31 per kl.
Jet fuel makes up for 40 percent of an airlines' operating cost and no immediate comments were available from airlines on the impact of the price hike on passenger fares.
ATF prices vary from airport to airport, depending on the local sales tax or VAT.
The three fuel retailers revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.
DGCA was yesterday asked by Civil Aviation Ministry to examine if it could take some steps provide any relief to air travellers.
"I have asked DGCA to use its powers and look into the matter, although beyond a point, we cannot do anything," Civil Aviation Minister Vayalar Ravi said replying to a question on hiking air fares by airlines ahead of the festival season.
Noting that there is a "flexible mechanism" that governs air fares, he said the regulator would examine the issue as it affected the travelling public.
The fares of almost all major airlines have risen by an average of ten per cent due to the festive season, though sources in the airline industry maintain that due to high passenger traffic, the low-fare buckets were getting filled up fast leaving only high fare options.
The fare monitoring committee of the Directorate General of Civil Aviation, set up a year ago, was already analyzing the fare data on a daily basis, the sources said.
Asked to comment on planned shut down of low-cost carrier Kingfisher Red, Ravi refused to give a direct reply but said soaring prices of aviation turbine fuel (ATF) was a matter of concern for entire aviation industry.
Expressing concern over rising jet fuel prices, Ravi said he would soon write to state governments to reduce sales tax on ATF, though he had made similar requests earlier too.
"ATF price is a major challenge facing the aviation industry. ATF is going up because of increase in crude prices.
PTI
First Published: Friday, September 30, 2011, 18:58