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ATF price cut by 2.6%; to cost less than petrol, diesel

Press Trust of India  |  New Delhi 

or prices were Thursday cut by 2.6 per cent following the government decision to lower duty on the fuel.

Aviation turbine fuel (ATF) is now cheaper than petrol and diesel.

in was cut by Rs 1,962 per kilolitre, or 2.6 per cent, to Rs 72,605 per kl (Rs 72.6 per litre), according to a price notification issued by

It costs Rs 72,225 per kl in Mumbai, down from Rs 74,177.

Even at the reduced price, is at its highest level since March 2014.

The government had Wednesday cut duty on to 11 per cent from 14 per cent previously to give relief to the aviation industry that has been in recent weeks hit hard by rising fuel prices and plummeting rupee.

The move came after prices this month hit their highest level since January 2014. Rates had risen by 9.5 per cent since July, and over 58.6 per cent since July last year.

While the ATF has been cheaper than petrol before, the fuel used in aeroplanes is cheaper than even diesel now.

Petrol in costs Rs 82.36 per cent and diesel is priced at Rs 74.62.

Just last week, the government had cut duty on petrol and diesel by Rs 1.50 per litre and asked to subsidise the fuel by another Re 1 a litre. That step was matched by BJP-ruled states cutting local sales or VAT by an equal proportion to give customers hit by high auto fuel prices a relief of about Rs 5 per litre.

While the twin moves on auto fuels had led to a drop in price of petrol from a record high of Rs 84 per litre to Rs 81.50 in and that of diesel from an all-time high of Rs 75.45 to Rs 72.95 a litre on October 5, rate hikes on subsequent days have pushed prices upwards.

Petrol has risen by 86 paise per litre since then and diesel by Rs 1.67, negating the entire excise duty reduction in less than a week.

Petrol in costs Rs 87.82 per litre and diesel is priced at Rs 78.22.

The excise duty cut on ATF came after the government's move to raise customs duty on the fuel and 18 other non-essential import items last month, in a bid rein in current account deficit and shore up the rupee.

Basic customs duty of 5 per cent was imposed on ATF. It previously attracted nil duty. This led to an increase of Rs 2,000 per kl in prices.

The government had in 2016 hiked excise duty on ATF to 14 per cent from 8 per cent.

ATF like petrol and diesel is not covered by the goods and services (GST) regime, that on July 1 last year amalgamated 17 different central and state taxes.

The central government currently charges 14 per cent excise duty on ATF. On top of this, states charge up to 30 per cent sales or VAT - Odisha and have 5 per cent VAT while taxes ATF at 29 per cent, and Delhi at 25 per cent and at 28 per cent.

When the GST was introduced on July 1 last year, five commodities -- crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) -- were kept out of its purview for the time being.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, October 11 2018. 13:00 IST