Govt may let airlines hedge fuel price risk

Mumbai: ATF prices for domestic operations include 10% Customs duty, 8% excise duty and sales tax.
Domestic airlines may soon be able to hedge their risk of jet fuel prices. The government is considering a proposal to allow Indian carriers to hedge the price risk of aviation turbine fuel (ATF) purchased from oil marketing companies in the country.
Currently, fuel hedging is allowed only for international fuel uplifts, as the regulation allows hedging only if airline companies are physically importing or exporting jet fuel. ATF procurement is restricted through oil marketing companies.
Sources said the government had asked the Reserve Bank of India (RBI) to examine the possibilities of developing a mechanism that will enable hedging the prices in the Indian market.
When contacted, RBI officials declined to comment on the issue.
26/02/07 P R Sanjai/Business Standard

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Categories: General Aviation feb 2007