Jet fuel price cut by 3% to ₹83,072/kl on softening global oil benchmarks

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The price of jet fuel, or ATF, was on Sunday slashed by 3 per cent - the third straight monthly reduction on softening international benchmark prices.

The fall in international benchmark oil and gas prices also led to a Rs 24 per 19-kg cylinder cut in rate of commercial LPG used in hotels and restaurants.

The price of aviation turbine fuel (ATF) was reduced by Rs 2,414.25 per kilolitre, or 2.82 per cent, to Rs 83,072.55 per kl in the national capital - home to one of the busiest airports in the country, according to state-owned fuel retailers.

The price cut follows a 4.4 per cent (Rs 3,954.38 per kl) reduction on May 1 and a steep 6.15 per cent (Rs 5,870.54 per kl) reduction effected from April 1. Together with Sunday's reduction, the price cuts have more than offset the hikes that occurred earlier this year. 

A reduction in price of ATF will ease the burden on commercial airlines, for whom fuel makes up for almost 40 per cent of the operating cost.

No immediate comments could be obtained from the airlines on the price reduction.

The ATF price in Mumbai was slashed to Rs 77,602.73 per kl from Rs 79,855.59, while those in Chennai and Kolkata were reduced to Rs 86,103.25 and Rs 86,052.57 per kl, respectively.

Oil firms also reduced the price of commercial LPG by Rs 24 per 19-kg cylinder. Commercial LPG now costs Rs 1,723.50 in the national capital and Rs 1,647.50 in Mumbai.

This reduction follows a Rs 14.50 cut on May 1 and a Rs 41 per cylinder cut in rate effected on April 1.

International oil prices have softened in the last couple of months as global trade war eroded the outlook for fuel demand.

Prices of ATF and LPG differ from state to state depending on the incidence of local taxes, including VAT.

The rate of cooking gas used in domestic households, however, remained unchanged at Rs 853 per 14.2-kg cylinder. The price of the domestic LPG was hiked by Rs 50 per cylinder in April.

State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) revise prices of ATF and cooking gas on the first of every month based on the average price of benchmark international fuel and foreign exchange rate.

While international oil prices have softened, domestic rates of petrol and diesel continue to remain frozen. Rates were cut by Rs 2 per litre in mid-March last year, ahead of the general elections. Petrol costs Rs 94.72 a litre in Delhi, while diesel is priced at Rs 87.62.