Jet fuel (ATF) price was today cut by a steep 12.5 per cent and non-subsidised domestic cooking gas (LPG) by Rs 43.50 per cylinder as international oil prices slumped to five-year lows.
The price of aviation turbine fuel (ATF), or jet fuel, in Delhi was cut by Rs 7,520.52 per kilolitre, or 12.5 per cent, to Rs 52,422.92 per kl, oil companies announced today.
This is possibly the steepest cut in rates since ATF pricing was deregulated or freed in April 2002.
The cut, effective today, is the sixth reduction in jet fuel rates since August. The price was last cut by 4.1 per cent, or Rs 2,594.93 per kl, on December 1.
Jet fuel constitutes over 40 per cent of an airline's operating costs and the price cut will ease the financial burden of cash-strapped carriers.
No immediate comment was available from airlines on the impact of the price cut on passenger fares.
Following the global trend, the price of 14.2-kg non- subsidised LPG cylinder has been cut to Rs 708.50 from Rs 752 previously in Delhi.
This is the fifth straight reduction in rates of non- subsidised or market-priced LPG, which the customers buy after exhausting their quota of 12 cylinders at subsidised rates, since August.
A subsidised LPG refill currently costs Rs 417 in Delhi.
Price of non-subsidised LPG were last cut on December 1 by a steep Rs 113.
In six monthly reductions, non-domestic LPG rates have been slashed by Rs 214 per cylinder, bringing the price to a three-year low.
Separately, an oil ministry statement said the under- recovery or the difference between retail selling price and the actual cost, on subsidised LPG has come down to Rs 235.91 per cylinder from Rs 279.91 last month.
The same on kerosene has dropped to Rs 19.46 a litre from Rs 25.69 in December.
Brent crude, a pricing benchmark for more than half of the world's oil, sank 48 per cent in 2014 as US producers and the Organization of Petroleum Exporting Countries (OPEC) ceded no ground in their battle for market share amid a supply glut. Brent fell to USD 57.33 a barrel, the lowest since May 2009.
State-owned fuel retailers, Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) revise jet fuel and non-subsidised LPG prices on 1st of every month based on average imported cost and rupee-USD exchange rate.
