In a measure that spells relief to Indian airlines, state-owned oil distributors — Indian Oil, Bharat Petroleum and Hindustan Petroleum — have announced a 2.5 per cent cut in the aviation turbine fuel (ATF) price, on falling global rates.
ATF or jet fuel constitutes roughly 40 per cent of the operating cost of an airline, and the reduction in fuel rates would help ease the burden on Indian carriers.
No immediate comment was available from airlines on the impact the latest cut would have on air fares.
Jet fuel price in Delhi has been cut by Rs 974 per kilolitre or 2.5 per cent to Rs 37,982 per kl effective midnight tonight, said an official spokesperson of the Indian Oil Corp, the nation's largest oil firm.
This is the second reduction in ATF rates this month. On February 1, the price was cut by 5.5 per cent to Rs 38,956.38.
The two cuts have more than negated the steep 6.5 per cent hike in ATF rates effected on January 16. The fuel rates are now at par with those prevalent in October 2009.
In Mumbai, the rates were reduced by Rs 1,015 to Rs 39,167 per kl. The three oil firms revise jet fuel prices on the first and the 16th of every month based on the average global oil price in the previous fortnight.
The basket of crude oil India imports has averaged $72.09 this month against the January average of $ 76.61.