Domestic airlines get further relief with 7 per cent cut in jet fuel prices

With global oil prices hovering steadily around $40 a barrel for the past several weeks, public sector oil companies have reduced prices of jet fuel for the second time in a fortnight and the eleventh time since September to bring it to the levels prevailing in 2005.

Effective from Saturday night, public sector oil companies reduced the jet fuel prices by a further 7 per cent or approximately Rs2,125 per kilolitre, making the fuel available at Rs27,106 per kilolitre.

Since yesterday, jet fuel price went down Rs2,052 per kilolitre to Rs.27,106 in Delhi, in Mumbai, where over 50 airlines, both international and domestic airlines operate and approximately 700 landings and take-offs take place everyday, the jet fuel prices has come down from Rs29,985 per kilolitre to Rs27,861 per kilolitre while in Kolkata the reduced price is still high at Rs34,847 and Chennai, Rs30,317 per kilolitre.

The jet fuel prices are revised by state-run oil companies in the beginning and middle of every month taking the preceding fortnight average international jet fuel prices, which has also registered a sharp decline.

But even with jet fuel prices coming down by over 60 per cent since August but comprising nearly 40 per cent of an airlines operating cost in India, domestic airlines are in no mood to reduce air fare as all of them want to recover the cost after amassing huge losses, fixing fares below cost in the battle for a declining market share.

In domestic air travel, a passenger is charged a hefty Rs3,000 as fuel surcharge and taxes although the base price of a ticket is a mere Rs1,000-Rs1,500.