State run oil companies considering fall in prices of jet fuel in international market have slashed down ATF (Aviation Turbine Fuel) prices by 16%. An official from the Indian Oil Corporation said that they have always believed in passing on the benefit to consumers. He further informed that there would be reduction of Rs 11,784 per kilolitre in the price of ATF, which is the single biggest reduction in the fuel price in history.

 

Now, according to aviation industry experts, the cut in ATF prices would put pressure on airlines to reduce airfares. Evidently, most of the airlines had raised airfares after the June 1 hike by over 18%, or Rs 10,839.16 per Kiloliter in ATF. However, there has not been any reduction of airfare on airlines' behalf when there was a reduction of Rs 3000 per Kiloliter on ATF prices on June 5 this year.

 

The reduction in the prices of ATF has come in contrary to the statement made by Petroleum Minister Murli Deora some times ago that there is no scope for reduction in domestic retail prices of oil. He then had said that there were huge under-recoveries (on fuel sales), and he did not see how the Ministry could reduce retail prices when Indian companies continued to lose money.