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Jet fuel price cut by 1.8%, non-subsidized LPG by Rs23.50

LiveMint logoLiveMint 02-06-2014 PTI

New Delhi: Jet fuel prices have been cut by 1.8% and rates of non-subsidized cooking gas (LPG) by `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 `1,285.89 per kilolitre, or 1.81%, to `69,747.98 per kilolitre, according to Indian Oil Corp. Ltd (IOC), 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 `71,940.36 per kl as against `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% 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, the price of non-subsidised LPG, which customers buy after using up their quota of 12 subsidised cylinders, was cut by `23.50 per cylinder, the fifth straight reduction in rates since February.

Each non-subsidized 14.2kg cooking gas cylinder will now cost `905, down from `928.50, in Delhi. The rates were cut on February 1 by `107—from `1,241 per cylinder to `1,134, by `53.5 per cylinder in March to `1,080.50, by `100 to `980.50 in April and by `52 last month.

A subsidised LPG cylinder in Delhi costs `414. Non-domestic LPG rates were increased by a steep `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 `432.71 per subsidized cylinder from `449.14 in the previous month. The loss was `762.50 in January. The three fuel retailers—IOC, Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp Ltd—revise jet fuel and non-subsidised LPG prices on the first of every month, based on the average international prices in the preceding month.

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