New Delhi: Higher state taxes coupled with greater incidence of central excise duties has resulted in petrol becoming more expensive per litre than aviation turbine fuel (ATF), the cost of which is borne only by those who can afford to fly.
In Delhi, for example, the latest petrol price is Rs.59.95 per litre, according to state-run oil marketing company Indian Oil Corporation (IOC). ATF in the national capital costs a significantly lower Rs. 35.13 per litre for domestic flights. That is a difference of Rs. 24.82 per litre. The difference between the price of petrol and ATF in Mumbai, Kolkata and Chennai is Rs. 31.80,Rs. 23.40 and Rs. 21.80 per litre, respectively.
All fuels are subject to several taxes, both at the central and state levels, resulting in their final market price being significantly higher than the price dealers pay for the fuel.
“There is a demand from the airline industry that ATF duties be reduced. Their argument is ATF tax rates are much higher in India than in other countries. But with the prices going down due to the fall in oil prices and airline companies recording large profits, there is an argument for ATF duties to go up,” K. Ravichandran, Senior Vice President and Co-Head, Corporate Sector Rating at ICRA told The Hindu.
One major reason for the mismatch between the prices of ATF, a highly refined fuel and petrol is the higher burden of central excise duties on the latter, Mr. Ravichandran said.
04/02/16 TCA Sharad Raghavan/The Hindu
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In Delhi, for example, the latest petrol price is Rs.59.95 per litre, according to state-run oil marketing company Indian Oil Corporation (IOC). ATF in the national capital costs a significantly lower Rs. 35.13 per litre for domestic flights. That is a difference of Rs. 24.82 per litre. The difference between the price of petrol and ATF in Mumbai, Kolkata and Chennai is Rs. 31.80,Rs. 23.40 and Rs. 21.80 per litre, respectively.
All fuels are subject to several taxes, both at the central and state levels, resulting in their final market price being significantly higher than the price dealers pay for the fuel.
“There is a demand from the airline industry that ATF duties be reduced. Their argument is ATF tax rates are much higher in India than in other countries. But with the prices going down due to the fall in oil prices and airline companies recording large profits, there is an argument for ATF duties to go up,” K. Ravichandran, Senior Vice President and Co-Head, Corporate Sector Rating at ICRA told The Hindu.
One major reason for the mismatch between the prices of ATF, a highly refined fuel and petrol is the higher burden of central excise duties on the latter, Mr. Ravichandran said.
04/02/16 TCA Sharad Raghavan/The Hindu
