Aviation stocks surge, IndiGo climbs 5% as govt cuts excise duty on ATF

Bucking the broader market trend, aviation stocks climbed up to 5.7 per cent in the early trade on Thursday after the government on Wednesday cut excise duty on jet fuel to 11 per cent. 

At 09:50 am, shares of InterGlobe Aviation were trading 4.60 per cent higher at Rs 780.05 apiece on BSE while those of SpiceJet were up 3 per cent at Rs 70.25. Jet Airways was trading over 1 per cent higher at Rs 191 on BSE. InterGlobe Aviation hit a high of Rs 789, up 5.7 per cent during the session. 

Excise duty on aviation turbine fuel (ATF) has been reduced to 11 per cent from 14 per cent with effect from October 11, a notification issued by the revenue department in the finance ministry said. 

Jet fuel prices this month hit their highest level since January 2014 as rising international oil prices and plummeting rupee value pushed rates. 

ATF prices, which currently are cheaper than petrol and diesel in Delhi, have since July spiked up by 9.5 per cent. They have been on an upswing since July last year, rising every month except in July 2018. Jet fuel was priced at Rs 47,013 per kilolitre in July last year and has risen by 58.6 per cent since then, said a PTI report. 

The aviation industry has been seeking lower taxes to help offset the impact of high oil prices. Among others, Ajay Singh of Spicejet had voiced concerns over rising international oil prices and asked the government to take up some policy measures to help the industry.