Jet fuel to be brought under PNGRB ambit


The cost of aviation turbine fuel (ATF) across the country is likely to come down by up to 25 per cent after petroleum minister M Veerappa Moily agreed to bring it under the purview of the Petroleum and Natural Gas Regulatory Board (PNGRB).

Bringing it under PNGRB will make the pricing of jet fuel transparent and also check cartelisation by oil companies.

In a meeting with civil aviation minister Ajit Singh, the petroleum minister has agreed that it should come under PNGRB.

"After bringing ATF under PNGRB, we immediately expect to see its price coming down by around 25 per cent across the country," said a civil aviation ministry official.

The official added that this will bring ATF prices in India at par with airports such as Bangkok, Hong Kong and Singapore among others, where it is 20 to 25 per cent lower.

The official further said that cartelisation by companies will also be checked. He explained that rate of jet fuel sold at Delhi airport by all the three state-owned oil marketing companies — IOC, BPCL and HPCL — is Rs 54,479 per kilolitre (exclusive of taxes).

"There is not even a 50 paisa difference in the price offered by all three companies, which is a clear case of cartelisation and anomalies like these will be corrected once PNGRB regulates it," said the official.

Both Singh and Moily also decided to push for bringing ATF under declared goods, which will bring down the sales tax on ATF immediately to 4 per cent from as high as 33 per cent.

"Both the ministers will meet finance minister P Chidambaram to convince him to bring ATF under capital goods category and they will meet soon," said the official.

Airlines have been complaining about the high sales taxes on jet fuel. ATF cost constitutes around 50 per cent of its operating cost and states on an average levy 30 per cent sales tax.

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