There was a 19-day price freeze on petrol and diesel ahead of the Karnataka polls in May 2018 despite international fuel prices going up by nearly USD 5 a barrel. Though the government had deregulated petrol and diesel prices, rate changes have been in the past put on hold by public sector oil companies Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) for reasons that appear to be non-commercial. It was priced at Rs 65,815.47 per kl in January. In fact, oil companies used to revise ATF prices on the 1st of every month but they on March 21 adopted fortnightly revisions to pass on the benefit of falling international oil prices to the airlines.Įven non-PDS or market priced kerosene cost has seen rate reduction similar to ATF. More importantly, no airline has been operating since mid-March in view of restrictions placed to check the spread of coronavirus, yet oil companies have continued to revise downward jet fuel prices. Market analysts, however, said the same volatility was witnessed in ATF prices as well but that has not stopped the oil companies from passing on the cut to airlines. They used the same tool and did not pass on the Re 1 per litre hike required for switching over to ultra-clean BS-VI grade fuel from April 1. Oil companies, instead of passing on the excise hike to consumers, decided to adjust them against the reduction required because of the drop in international oil prices. Petrol and diesel prices were frozen soon after the government raised excise duty on the two fuels by Rs 3 per litre each to mop up gains arising from falling international rates. While the oil PSUs have regularly revised ATF prices, they have since March 16 kept petrol and diesel prices on hold ostensibly on account of extreme volatility in the international oil markets.
Similar reduction has been effected in other metro cities as well. ATF price in Delhi before the reduction cycle began in February was Rs 64,323.76 per kl and now costs Rs 22,544.75 per kl. Since February, jet fuel prices have been cut by almost two-thirds. This the steepest cut ever and sixth reduction in ATF prices since February.
In fact, even market priced or non-subsidised kerosene is much cheaper than petrol and diesel after its rates were cut 13.3 per cent to Rs 39,678.47 per kl (Rs 39.67 per litre), according to the notification.