Oil companies told to cut ATF prices: Praful Patel
11 Jun 2008
Mumbai: The government has asked oil companies to consider a reduction in the prices of aviation turbine fuel (ATF), in a bid to give some relief to aviation firms reeling under continuing losses, the civil aviation minister Praful Patel said.
"We've asked the oil companies to consider a reduction in the base price of ATF," Patel said after a meeting with the prime minister.
The civil aviation ministry, he said, has called for urgent steps to bail out the aviation industry, facing problems due to high fuel prices as otherwise it will have a "cascading effect" on the whole economy.
"This is an extraordinary situation. There is a crisis in the aviation sector and we must all collectively try to find out the solution as otherwise it is going to effect in a big way to the overall growth of the sector," Patel said.
Patel said he had discussed the emerging scenario with the prime minister, the finance minister, the deputy chairman of the planning commission and others.
"We have also explained that it is not so easy for a vital sector like aviation go belly up and it will have cascading effect or multiplied effect on the entire economy," he said.
"I have proposed a declared good status of 3 per cent for fuel price states. That is what I have proposed that alone will bring a relief of more than Rs 3,500 crore to the sector. It itself is a big relief," he said.
ATF prices have gone up to 100 per cent in the last one year and three time more since last four years. Price has gone up from Rs21,000 per kilo litre in 2004 to more than Rs70,000 now.