Jet fuel prices cut by a further Rs5,580 per kilo litre

Public sector oil marketing companies today announced a fifth round of reduction in the prices of jet fuel (aviation turbine fuel or ATF), giving cash-strapped airlines a fresh bout of relief.

State-run oil firms have cut jet fuel prices by a further Rs5,580 per kilo litre (around 12 per cent) after global prices of crude oil sank to near $50 levels.

ATF prices are now at par with levels that prevailed in September 2007.

Jet fuel price in Delhi will be down Rs5,585.19 per kl at Rs39,380.51 per kl from midnight tonight, sources at Indian Oil Corporation, the country's largest fuel retailer, said.

In Mumbai, ATH prices will come down to Rs40,687.42 per kl from Rs46,518.85 per kl.

This is the third cut in jet fuel prices this month and the fifth since August this year, when the prices stood at an all-time high of Rs71,028.26 per kl.

Oil marketing companies have cut jet fuel prices almost every month since August. The government also had scrapped a 5 per cent customs duty on jet fuel to help airlines out of the slump.

However, the airlines that have amassed huge losses fixing fares below cost in the battle for market share, are unlikely to offer any reduction in fares now.

High fuel prices and the economic slowdown have combined to push losses of leading private airlines such as Jet Airways and Kingfisher, who have since announced plans for joint operation to cut cost.

High fuel prices that have affected profitability of airlines, have even led to defaults in payments of ATF bills by leading private players like Kingfisher Airline.