Friday, August 05, 2022

'Hike in ATF prices made air travel costlier': Government in Parliament

New Delhi: The cost of aviation turbine fuel (ATF) has increased by 5.3 per cent since the beginning of this year. This has added to the cost of flight tickets as airlines in India pay over 50 per cent more for ATF.

“One of the main reasons is the increase in the price of crude in the international market. The war in Ukraine and foreign exchange variations and the levy of Value Added Tax are some of the other reasons for the increase,” said Minister of State for Civil Aviation General VK Singh while responding to a question in Parliament.

One must also factor in that the ATF price has been market-driven since April 2001, this was in line with the government’s decision to deregulate the administered pricing mechanism.

“Public sector oil marketing companies (OMCs) take appropriate decisions on pricing of ATF in line with the pricing of products in the international market. The government has constantly had consultations with airlines and OMCs on the pricing of ATF,’’ General Singh added.

Taking cognizance of the high VAT on ATF being levied by States, the issue was taken up with the states/Union Territories.

As a result of this VAT on ATF has been reduced by 16 states and UTs. These include Andaman and Nicobar Islands, Uttrakhand, Jammu and Kashmir, Ladakh, Himachal Pradesh, Tripura, Madhya Pradesh, Haryana, Karnataka, Uttar Pradesh, Gujarat, Dadra and Nagar Haveli, Daman and Diu, Arunachal Pradesh, Manipur, Jharkhand and Mizoram.

05/08/22 New Indian Express

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