Govt may allow airlines to import 10% ATF directly

New Delhi: Leading legacy carriers have urged the Central government to re-allow the airlines to import aviation turbine fuel (ATF) directly. Airlines were last permitted to directly import aviation fuel during 1995-96 for a very short span. That led to reduction in fares while operating costs came down considerably for companies like Jet Airways, Indian Airlines and Air Sahara.
However, sources said that though the government is unlikely to allow import of 100% of the airlines' requirement, it may agree to allow import of up to 10% of their annual consumption directly.
ATF sales tax varies from state to state from 26% to 30%. Besides that, there is an 8% excise duty on aviation fuel.
According to analysts, the airline industry can save up to $450 million if it is allowed to procure fuel at international prices. However, at present, only the public sector oil companies like Indian Oil, Bharat Petroleum Corporation, etc, have the necessary fuel storage and hydrant systems at the airports.
24/02/07 Atreyee Dev Roy/Financial Express

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Categories: General Aviation feb 2007