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Fuel price cut brings respite to bleeding Indian airlines
Rohit Kaul, New Delhi, November 7, 2014

INDIAN state-run oil marketing companies announced a 7.3 per cent cut in prices of aviation turbine fuel last week, offering relief to the country's carriers, though the industry says that more could be done to help airlines.


This is the fourth consecutive price cut since August as international oil rates tumble, the most recent being a three per cent drop last month.


Fuel costs are now US$1018.85 per kilolitre in Delhi as compared to US$1100.11 before.


Sanjiv Kapoor, COO, SpiceJet, commented: “Fuel prices are 40-60 per cent higher in India than rest of the world. The price cut will help reduce the bleeding of airlines.”


“Though fuel has become almost 20 per cent cheaper, its price has been cut around 11 per cent by oil companies. So, if oil companies pass the full benefit to airlines it will further help them to control losses,” said Rajji Rai, chairman, Uniglobe Swiftravel.


“Fuel in India becomes expensive because of the 20-30 per cent tax levied by state governments. There is a need to bring aviation turbine fuel under the declared goods category, which puts it in the tax bracket of a uniform four per cent,” said Ranjan Kumar Mishra, managing director of Eastern Voyage.

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