Budget 2008: Aviation industry wants high aviation fuel prices brought down

The Indian aviation industry expects the 2008 union budget to bring down the cost of aviation turbine fuel (ATF). Amongst the highest in the world, ATF accounts for over 45 per cent of the operational costs of carriers in India.

The industry expects ATF to be designated as a declared good, which would ensure that it attracts a uniform sales tax of four per cent across the country. ATF is variably taxed by different states in the country.

According to industry sources, ATF accounts for only 18-20 per cent of the operating costs of carriers in most other countries.

According to Federation of Indian Airlines (FIA) data, the carriers pay $620 (Rs24,806) per kilolitre (KL) in Dubai and $577 (Rs23,064) per KL in Singapore. These costs are in sharp contrast to what domestic carriers pay in India for domestic operations, which range anything between $1,000-1,125 (Rs40,000 to Rs45,000) per KL depending on the taxes levied by the states.

These taxes vary between 4 and 38 per cent.

In Kolkata ATF costs Rs45,537 per KL, more than Hyderabad, where it is at Rs44,241 per KL and Thiruvananthapuram where they are charged Rs43,907 per KL.

In Mumbai, ATF costs Rs.41,105 per KL, while the lowest ATF price is in Delhi at Rs.39,767 per KL.

High fuel costs compel carriers to levy a fuel surcharge of Rs1,650 on all passenger tickets.