Jet fuel price slashed by 1.8%, non-subsidised LPG by Rs 23.50

Jet fuel prices have been cut by 1.8 per cent and rates of non-subsidised cooking gas (LPG) by Rs 23.50 per cylinder after the rupee's appreciation lowered import costs.

The price of jet fuel, also known as aviation turbine fuel (ATF), at Delhi was cut by Rs 1,285.89 per kilolitre, or 1.81 per cent, to Rs 69,747.98 per kl, according to Indian Oil Corp, the nation's largest fuel retailer.

This is the third reduction in jet fuel rates since April. Declining international oil prices and the strengthening of the rupee against the US dollar have made imports cheaper.

In Mumbai, jet fuel costs Rs 71,940.36 per kl as against Rs 73,306.89 per kl previously, IOC said. The rates vary because of differences in local sales tax or VAT.

Jet fuel constitutes over 40 per cent of an airline's operating costs and the price cut will ease the financial burden of cash-strapped carriers.

No immediate comments were available from airlines on the impact of the price cut on passenger fares.

Separately, price of non-subsidised LPG, which customers buy after using up their quota of 12 subsidised cylinders, was cut by Rs 23.50 per cylinder, the fifth straight reduction in rates since February.

Each non-subsidised 14.2-kg cooking gas cylinder will now cost Rs 905, down from Rs 928.50, in Delhi.

The rates were cut on February 1 by Rs 107 — from Rs 1,241 per cylinder to Rs 1,134, by Rs 53.5 per cylinder in March to Rs 1,080.50, by Rs 100 to Rs 980.50 in April and by Rs 52 last month.

A subsidised LPG cylinder in Delhi costs Rs 414. Non-domestic LPG rates were increased by a steep Rs 220 per cylinder at the beginning of the year but have now been cut in line with softening international rates.

IOC said losses on LPG have come down to Rs 432.71 per subsidised cylinder from Rs 449.14 in the previous month. The loss was Rs 762.50 in January.

The three fuel retailers — IOC, Hindustan Petroleum Corp and Bharat Petroleum Corp — revise jet fuel and non-subsidised LPG prices on the first of every month, based on the average international prices in the preceding month.

Hike lifts oil stocks

Shares of three oil marketing companies — BPCL, HPCL and IOC — on Monday rose by as much as 6.5 per cent after diesel prices were hiked by 50 paise a litre.

Stock of Bharat Petroleum Corporation Ltd surged 6.41 per cent to close at Rs 555, while Hindustan Petroleum Corporation Ltd ended 5.59 per cent higher at Rs 423.30 on the BSE.

Similarly, Indian Oil Corporation's scrip rose by 0.76 per cent to Rs 363.60.

Diesel prices were on Saturday hiked by 50 paise a litre, excluding state levies.

The announcement of the hike gave clear indications to investors that the BJP government will continue with reforms of the previous Congress regime.

The UPA had in January 2013 decided to raise diesel prices in small doses of up to 50 paise every month till such time that the subsidy on nation's most consumed fuel is eliminated.