Saturday, July 2 2022

New Delhi, March 17: India’s national airlines have called for a streamlining of kerosene taxes to counter the massive rise in fuel prices.

On Wednesday, high crude oil prices led OMC to raise ATF prices to over Rs 1 lakh per kilolitre. In the national capital, the price of jet fuel was increased by 18.32% to Rs 1,10,666.29 per kiloliter (kl) from Rs 93,530.66 per kl.

In the other metropolitan cities of Kolkata, Mumbai and Chennai, the price has been increased to Rs 1,14,979.70, Rs 1,09,119.83 and Rs 1,14,133.73 per kl, respectively.

The rise came as the price of crude oil remained at elevated levels due to the Russia-Ukraine crisis. Fuel retailers revise jet fuel prices fortnightly.

“Over the past few weeks, crude oil prices have climbed to a seven-year high of nearly $140 a barrel, due to the ongoing conflict in Europe. This has caused ATF prices to rise by more than 50% from January 2022 to date, including today’s 18% surge,” said Ronojoy Dutta, full-time director and CEO of IndiGo.

“This situation affects us negatively, given that ATF represents more than 45% of our operational costs. We have been in talks with the government to subject ATF to GST, as it has an input tax credit,” Dutta added.

According to Dutta, such measures are needed more than ever to offset this rising cost and make flying viable for airlines and affordable for consumers.

“A rationalization of taxes will lead to strong growth for the sector, creating a multiplier effect throughout the economy, promoting trade, tourism and job creation,” said Dutta.

In India, domestic ATF prices are derived from international fuel prices, denominated in US dollars, which makes ATF prices sensitive to exchange rate fluctuations.

Notably, the Rupee has also seen a depreciation against the US Dollar lately, which has been reflected in the prices.

the ATF tariffs are much more expensive than international benchmarks due to high levels of taxation.

The industry has demanded that the type of fuel be subject to GST, similar to the status given to “Bunker Diesel” which is used in the shipping industry.

A Vistara spokesperson said: “The resumption of scheduled international flights from March 27 is expected to boost demand and we hope will help the industry manage rising ATF prices.”


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