Aviation Turbine Fuel (ATF) price in India was reduced by a sharp 14.7 per cent on January 1, bringing much-needed respite to airlines reeling under a cash crunch. The price has been cut by 9,900 per kilo litre, bringing it down to 58,060.97 per kilo litre, according to a notification issued by oil PSUs.

At 58.06 per litre, aviation fuel is now cheaper than petrol and diesel , and less expensive than even non-PDS kerosene in Mumbai. The prices of petrol and diesel in Delhi stand at 68.65 and 62.66 respectively. The corresponding prices in Mumbai are 74.30 and 65.56 respectively. In Mumbai, even kerosene (which is not supplied through the subsidized Public Distribution System) is priced higher than ATF at 59.53 per litre.

This is the sharpest price dip for ATF, and the second in a month. Before December 1, ATF prices stood at a staggering 76,378.80 per kl. On December 1, prices were slashed by 8,327.83, or 10.9 per cent. It is now at its lowest in a year.

This has been enabled by the declining global crude prices. Oil PSUs revise ATF prices on the first of every month based on the average international rate and the Rupee-US Dollar exchange rate in the previous month.

High prices of aviation fuel, combined with low fare yield and exchange rate volatility have brought the airline business in India down to its knees, and the slashing of fuel prices will bring much-needed cheer.