Airlines can now import ATF

New Delhi: The government is planning to allow domestic carriers to import aviation turbine fuel in bulk— a move that can significantly reduce airlines’ costs of fuel and consequently lower air fares. ATF prices in India are almost 70% higher than international prices due to heavy taxation. The landed price of imported ATF is almost 40% cheaper than the domestic price.
A civil aviation ministry official said airlines would be allowed to do this using the open general licence route. This could lower the operational cost of an airline by almost 12%, an industry executive said. At present, ATF accounts for 40% of the total operational cost of domestic airlines.
The sales tax on ATF varies from 4% to 39% in India. For instance, In Delhi, of the total fuel cost of Rs 37,421 a kilolitre, sales tax alone accounts for Rs 5,663. Apart from taxes, high margins of oil PSUs — ranging between 16% and 21% — further jack up jet fuel prices.
24/05/07 Atreyee Dev Roy & Sunny Verma

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Categories: General Aviation May 2007, New May 2007