Jet fuel now cheaper than diesel in India!

Ivan Leon

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May 27, 2008
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The price of aviation turbine fuel (jet fuel) has been cut steeply. In November 2014, the price of jet fuel fell by 30% and yesterday, by another 11.27%.

While the earlier cut made it cheaper than petrol, the last cut has helped it slip below the price of diesel in the country.

In Delhi, Jet fuel is now priced at Rs. 46.51 per litre, while diesel costs Rs. 51.52 per litre. Normally, jet fuel costs more than petrol or diesel, since it has a higher octane rating and is of a higher quality.

The price of crude oil has fallen by more than 50% in the last one year. This should have resulted in diesel and petrol costing considerably lesser as well.

But, the Government of India has hiked the rate of excise duty on the two fuels four times since November 2014 to keep their prices relatively high.

The Government deregulated the price of diesel in October last year. The price of diesel has fallen by Rs. 10.71 per litre since then. Had there been no hike in excise duty, the price would have cut by a further Rs. 7.50.

Similarly, the price of petrol has dropped by Rs. 14.69 per litre since August 2014. Without the excise duty hike, it would have been cheaper by a further Rs. 7.75.

Airlines are unlikely to drop their fares as they could use this drop in price of jet fuel to cut their losses. Jet fuel accounts for over 40% of an airline's operating costs.

http://www.team-bhp.com/news/jet-fuel-now-cheaper-diesel-india
 
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