Aviation min sees lower jet fuel prices

Bangalore: Civil Aviation Minister Praful Patel said on Thursday he had received a "positive response" from state-owned oil firms to cut base prices of jet fuel.
Indian airlines facing pressure from falling fares are also seeking lower taxes on jet fuel, which makes up nearly 30 percent of a carrier's operating cost.
"I have spoken to the petroleum minister and his colleagues and all the oil PSUs (public sector undertaking), and I have impressed upon them that we need to reduce the base price of fuel," Patel told reporters at an air show.
"The reason is not only taxation, but also that the oil PSUs are charging a higher base price," he said in response to a question on whether there would be a reduction in tax on jet fuel in the upcoming federal budget on Feb. 28.
"I have got a positive response and I hope to see the result of lower base price on fuel this year." Indian carriers are allowed to hedge fuel for their international flights but not for domestic operations, forcing them to buy fuel from state-run firms who dominate the local market.
Separately, Patel said there were still some matters to be sorted on a proposed merger of state-owned airlines Indian and Air-India.
"Some issues on workers, how they will be integrated and seniority, and other issues are being looked into," he said.
"There should not be any problem. Most of the issues that were seen as areas of concern or needed attention have been addressed," he said.
08/02/07 Reuters

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Categories: General Aviation feb 2007