Oil firms asked to provide break-up of ATF pricing
11 September 2007
New Delhi: The Indian government has asked oil companies to provide a break-up of the pricing of aviation turbine fuel (ATF) within 15 days in an effort to establish some clarity in ATF pricing. The civil aviation ministry is desperately seeking ways to reduce the high rates that airlines have to pay for ATF in the country.
ATF cost amounts to about 40 per cent of an airline's total operating cost.
The government demand was conveyed to top oil firm executives at a meeting chaired by the civil aviation secretary, Ashok Chawla. Though oil firms charge a high margin for supply of ATF, a number of other factors weigh in on the final cost as well, including State Sales Tax rates, which in some States goes as high as 36 per cent.
On an average, ATF prices are about 65 per cent higher in India than the prices in South-East Asia and the Gulf. As in March, the ATF price in India was Rs36,100 per kilolitre compared with Rs20,779 in Singapore, Rs20,874 at Kuala Lumpur, Rs21,272 in Bangkok and Rs21,700 in Sharjah.
The industry has been asking for a reduction in the base price of ATF and the customs duty levied on it, leveling a flat four per cent excise duty and giving "declared goods" status to ATF to attract a uniform four per cent sales tax across the country.