Patel hints at airfare hike as ATF prices rise

Posted By: Rama Mohan
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Praful Patel
New Delhi, Jan 18: Union Civil Aviation Minister Praful Patel has hinted that rise in prices of aviation turbine fuel (ATF) may bear impact on airfares.

The Minister's statement came in the wake of airlines mulling yet another hike in airfares as the state-owned oil companies have hiked jet fuel prices for the seventh time since October. "Rise in ATF prices will impact airfares. The government will only intervene if fares are hiked without any reason," Patel said.

Now, in Delhi the ATF price has been increased by two per cent to Rs 48,764 per kilolitre after the January 15th rise by the state-owned oil companies. Now in Mumbai jet fuel costs Rs 40,046 per kilometre, whereas in Kolkata the ATF being sold at Rs 56,186 per kilolitre.

For airlines, jet fuel costs account for 40 per cent their operation costs. This has compelled Praful Patel to leave it to the airlines to make a decision on airfare price hike.

On the other hand, crude oil price in international market is around Rs $90 per barrel. It is said that following the US's economic recovery, it is expected an increased demand for fuel from the country and the crude prices may cross the $100 per barrel.

Ultimately, the rise in ATF prices is going to have an adverse impact on petrol and diesel prices in India where the consumer has already faced two price hikes within a span of short period.

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