Aviation fuel prices slashed 4%

Aviation fuel prices slashed 4%
1 Feb 2009,

NEW DELHI: Jet fuel prices touched a three-and-a-half-year low on Saturday. Oil companies reduced aviation turbine fuel (ATF) prices by 4%, making it the ninth fall since the August 2008 record highs, barring a minor increase in January. ATF prices are now revised every fortnight.

Following the latest cut, ATF prices are now at the level of 2005 summer. In Delhi, for instance, the price per kilolitre is Rs 30,288 — a whopping 57% lower than the last August record price of Rs 71,028 per kl. The August record was set as global crude price that time was at a historic $147 per barrel.

Airlines, that had to hike fares due to higher oil prices last year, have slashed fares now. They have reintroduced low basic fares of Re 1 or Rs 99 that are topped by taxes and surcharge of nearly Rs 3,000. Some budget carriers are also offering all-inclusive fares of less than Rs 2,000.

"We may have lowered fares but the overall economic slowdown has meant that fewer people are travelling. The January-March period is anyway low travel season but this time it is even worse. We are trying to stimulate demand but with people unsure of their jobs and incomes, things look pretty bleak," admitted an airline CEO.