Reducing jet fuel prices for the third consecutive fortnight, state-run oil companies today cut rates by 1.6 per cent, a move that will ease burden on cash-strapped airlines.
Aviation turbine fuel (ATF) prices in Delhi was reduced by Rs 636 a kilolitre to Rs 38,697 per kilolitre, effective midnight tonight, an official of Indian Oil Corp (IOC), the nation's largest oil firm, said.
With the latest cut, jet fuel rates have come down from Rs 40,422.62 per kl in November and are now at the levels prevalent in August.
The three oil firms revise jet fuel prices on the first and the 16th day of every month based on the average global oil price in the previous fortnight.
On December 1, IOC, Bharat Petroleum and Hindustan Petroleum had reduced jet fuel rates by one per cent on easing international oil prices. It was followed with a 1.6 per cent rate cut on December 16.
In Mumbai, ATF rates were reduced by Rs 649 to Rs 39,911 per kl. It currently costs Rs 40,560.23 per kl in the city.
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The three consecutive price reductions come on the back of 2.4 per cent increase in jet fuel prices last month.
The ATF price in Kolkata has been cut by Rs 649 per kl to Rs 46,909 and that in Chennai by Rs 670 to Rs 42,683 per kl, the official said.
ATF rates had peaked to Rs 71,028.26 per kl in August 2008 when international crude oil prices touched a historic high of USD 147 per barrel.
With the global financial crisis and the following economic slump and drop in demand, oil prices shaved off more than USD 100 per barrel. This reflected in ATF rates that fell to Rs 27,106 per kl in March. The prices have since then firmed up.
Jet fuel constitutes roughly 40 per cent of the operating cost of an airline and the reduction in fuel rates would help ease the burden of Indian carriers, most of whom are loss making.