Aviation fuel (ATF) prices fell by the strongest ever 12 percent on Monday, the second drop in as many weeks, as international oil prices soften amid fears of a recession.
Aviation turbine fuel (ATF) prices were slashed by Rs 16,232.36 per kiloliter, or 11.75 percent, to Rs 121,915.57 per kl in the national capital, a price report from state-run retailers showed.
This is the strongest rate cut ever and follows a Rs 3,084.94 per kl (2.2 percent) cut that was implemented on July 16.
At the same time, the rates of commercial LPG – used by hotels, restaurants and other business establishments – were reduced by Rs 36 to Rs 1,976.50 per 19kg cylinder.
This is the fourth cut in commercial LPG tariffs since May. In total, prices have dropped by Rs 377.50 per 19kg cylinder.
There was no change in the price of domestic cooking gas LPG used in domestic kitchens. A 14.2kg domestic LPG cylinder costs Rs 1,053 in the national capital.
While ATF prices are revised on the 1st and 16th of each month based on the international benchmark rates for oil over the past two weeks, commercial LPG rates change once a month.
The price of ATF – the fuel that allows aircraft to fly – peaked to Rs 141,232.87 per kl (Rs 141.23 per liter) on June 16, after a record increase of 16 percent (Rs 19,757.13 per kl).
International oil prices have fallen amid fears of a recession in the major economies. Brent – the world’s most well-known benchmark – traded at $103.60 a barrel on Monday, down from $110 last week.
In addition to the two rate cuts on July 16 and August 1, ATF prices were slashed by a whopping 1.3 percent (Rs 1,563.97 per kl) on June 1. But for these three cuts, ATF prices have risen throughout 2022.
In total, rates had been increased 11 times since the beginning of the year. This has almost doubled the rates in six months.
Prior to the two consecutive discounts, prices had risen 91 percent (Rs 67,210.46 per kl) since January 1.
Since jet fuel made up nearly 40 percent of an airline’s operating costs, the price hike had led to an increase in flying costs. Now there is some relief for the airlines.
Meanwhile, petrol and diesel prices remained unchanged at Rs 96.72 per liter and Rs 89.62 per liter respectively.
An excise tax cut by the government had helped the price of petrol fall by Rs 8.69 per liter on May 22 and diesel by Rs 7.05 per liter on May 22. But before that, the base price has remained unchanged since April 6.
Before that, prices had risen by a record Rs 10 per liter each.
The sales prices of petrol, diesel and domestic cooking gas are far below cost price. Petrol and diesel rates are reviewed daily based on comparable rates in the international market.