Jet fuel prices were slashed by 12 per cent after oil firms reverted back to fortnightly revisions to pass on the benefit of falling crude oil prices, but rates of petrol and diesel remained unchanged for the seventh straight day to adjust the hike in excise duty.
State-owned oil firms cut aviation turbine fuel (ATF) price by Rs 6,687.75 per kilolitre (kl) or 11.76 per cent, to Rs 50,171.26 per kl - the lowest since September 2017, according to a price notification of oil marketing companies.
This is the third straight reduction in jet fuel rates since February, which make up for as much as 40 per cent of an airline's running cost. In all, rates have fallen by Rs 14,152.5per kl or 22 per cent.
ATF prices, which already were lower than petrol and diesel, are now even lower than the rates of non-subsidised kerosene which comes for Rs 58,818.07 per kl, according to price notification of oil firms.
Petrol price remained unchanged at Rs 69.59 a litre in Delhi and diesel at Rs 62.29 for the seventh day in a row, as oil firms adjusted the Rs 3 per litre hike in excise duty on the two fuels effected by the government on March 13.
The excise duty hike, which would give the government Rs 39,000 crore additional revenue, could have led to an increase in retail prices by Rs 3 per litre each, but the oil companies adjusted them against the fall in international crude prices which halved to less than USD 30 per barrel.
ATF prices were deregulated in 2002, after which Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) revised rates on 1st and 16th of every month after accounting for changes in benchmark international prices and foreign exchange rates in the previous fortnight.
In November 2012, however, they decided to revise rates on 1st of every month.
But on Saturday, oil firms decided to revert to fortnightly revisions to pass on the benefit of falling international oil prices to the airlines.
Petrol and diesel prices, which are changed on a daily basis, however remained unchanged since March 16.
ATF price comes to Rs 50.17 per litre and is cheaper than present rate of petrol and diesel.
The reduction in jet fuel prices comes as a relief to airline industry which has seen widespread flight cancellations and travel bans in view of the coronavirus pandemic.