 "Airlines can easily soak jet fuel rise, says govt")
The Federation of Indian Airlines (FIA) has written to the petroleum ministry for a rollback of the 12 per cent rise in jet fuel prices by oil companies. Copies of the letter have been sent to the civil aviation and finance ministries. The letter has also requested the appointment of an independent price regulator, failing which they will go to the Competition Commission of India (CII). "We request that this irrational price revision be reversed. Additionally, we file that an independent price regulator be appointed with immediate effect," the letter said. IndiGo, Jet Airways, SpiceJet and GoAir are part of this organisation.
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Civil aviation secretary Rajiv Nayan Choubey said that over the past 13 months, there has been a decrease in ATF base price by over 25 per cent. "By increasing the excise duty, the government is only taking six per cent of that in its coffers. If you couple this with the price rise by oil companies, the total rise in price will amount to 11.5 per cent. The airlines can absorb that easily," said Choubey.
An official from a state oil marketing company said that the price revision was due to a mix of excise rate rise and an upward revision in the benchmark rates of Argus and Platts indices for the Gulf region. "We refer to the monthly weighted average of jet fuel on these two indexes and the rise in domestic jet fuel price has been made in line with the increase in index rates. The other factor for the price rise is the increase in the excise rate," the official added.
In the Budget, Finance Minister Arun Jaitley had raised the excise duty on jet fuel from eight to 14 per cent.
The oil companies have increased their prices. The jet fuel price in Delhi was raised by Rs 4,174 per kilolitre (kl), or 12 per cent, to Rs 39,301 per kl.