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More than one third of jet fuel price is taxes: Govt

Last Updated: Monday, August 3, 2009 - 18:22

New Delhi: The government on Monday admitted in
Parliament that Central and state taxes made up for more than
one-third of the jet fuel price, corroborating the statement
of private airlines which had threatened to go on a `strike`
over their demand for a cut in the levies.

However, the government said, it did not control the
price of aviation turbine fuel (ATF) as it was a deregulated

The minister of state for petroleum and natural gas,
Jitin Prasada, told Rajya Sabha in a written reply that the Rs
37.48 per litre retail selling price of aviation turbine fuel
(ATF) in Mumbai comprised Rs 13.46 a litre in excise duty and
sales tax.

The basic price of the jet fuel in Mumbai, the nation`s
busiest airport, was Rs 24.02 per litre. Freight and other
cost add Rs 3.68 to the price while excise duty contributed Rs
2.28 a litre.

State sales tax is the biggest component, making up for
one-fifth or Rs 7.50 per litre, of the retail ATF price, he

Sales tax was the highest in Chennai adding Rs 9.03 to
the price and the lowest in Delhi where only Rs 6.05 a litre
was added. In Kolkata, the state government earned Rs 8.88
per litre from jet fuel sales.

Prasada said sales tax on petrol made for more than
one-fifth of the retail price of Rs 48.76 a litre on Mumbai.
The Maharashtra government earns Rs 11.77 from petrol. The
state government`s sales tax added Rs 7.88 in the Rs 36.70 a
litre sale price in Mumbai.

Delhi had relatively a lower sales tax, Rs 7.44 a litre
on petrol and Rs 3.90 per litre on diesel, he said.

State-run fuel retailers revise price of the fuel that
makes up for 40 per cent of the operating cost of airlines,
every fortnight based on the average international rates.

"The methodology adopted in fixing the price of ATF by
the public sector oil marketing companies at the airports is
based on the ex-refinery price of jet fuel which is linked to
the import parity price," Prasada said.

Bureau Report

First Published: Monday, August 3, 2009 - 18:22
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