Aviation fuel price goes up again, but no fare hike now

July 31st, 2008 - 10:38 pm ICT by IANS  

New Delhi, July 31 (IANS) State-run oil companies Thursday hiked aviation turbine fuel (ATF) prices by 2.8 percent, but airline operators said they will wait and watch the market situation before taking a decision on raising airfares. Aviation fuel in New Delhi will now be costlier by Rs.1,931.07 per kilolitre from midnight, a senior Indian Oil official said.

This is the second state increase in ATF prices, which are revised once a month based on monthly average of global oil prices, said the official.

The benchmark Brent crude price has been falling steadily since July 11, when it peaked at $147.02 per barrel; it was going for $125.93 Thursday, around the same price that prevailed mid-May, much before the first ATF price in India June 9.

An Air India spokesperson said ATF prices depended on demand and supply and the dynamics of the market. “The market is extremely volatile currently,” he said.

The fuel would now be priced at Rs.71,028.26 per kilolitre from Aug 1 as against Rs.69,097.19 per kilolitre.

Similarly, in Mumbai, aviation fuel prices have been hiked to Rs.73,673.56 as against Rs.71,630.53 per kilolitre, said an Indian Oil official.

The fuel will cost $41.68 per kilolitre more for international airlines refuelling at Delhi. The new rates for ATF for foreign lines, which do not pay local sales tax, will be $1,290.58 per kilolitre.

Reacting to the aviation fuel hike, the Air India spokesperson said it would first look at the impact of the aviation fuel hike. “We will be the last to increase the fares,” he said.

“We cannot decide on fare hike now. We will assess the market situation first,” said a Jet Airways spokesperson.

The state-owned Air India and budget airline SpiceJet hiked fares June 19 by at least Rs.300 following the first upward revision of turbine fuel (ATF).

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