Lok Sabha Question No. 3352 (UNSTARRED), answered on 2018-03-15
Subject: Impact of ATF Price on Aviation Sector
Ministry: CIVIL AVIATION
Asked by: MALLIKARJUN  KHARGE, Kunhalikutty, P.K.

## GOVERNMENT OF INDIA

UNSTARRED QUESTION NO. : 3352 (To be answered on the March 2018)

## MINISTRY OF CIVIL AVIATION LOK SABHA

Impact of ATF Price on Aviation Sector

3352.

SHRI MALLIKARJUN KHARGE SHRI PK KUNHALIKUTTY

## Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a) whether the of Aviation Turbine Fuel (ATF) for domestic airlines have increased from the past year and if sO, the details thereof and the reasons therefor; price
- (c) whether due to a steep fall in crude oil prices in international market; the of ATF has been slashed by 11.70% by the oil marketing companies, if s0, the details thereof; price
- (b) whether the Government has anticipated that a future rise in the crude oil prices can lower the country's passenger traffic and adversely impact the growth 0f aviation-sector and if sO, the details thereof and the steps taken by the Government in this regard;
- (d) whether the Directorate General of Civil Aviation (DGCA) or Government has taken any steps to bring down the exorbitant airfare charged by the airline companies in India, if the details thereof; S0,
- whether the Government is having any proposal to include ATF in GST provisions to have uniform ATF cost throughout India and if the details thereof and if not, the reasons therefor?
- (e) whether the Government would ensure reduction in ATF which in turn reduces the operating cost of the airlines, and lowering of airfares, if the details thereof; and price SO,

## ANSWER

Minister of State in the Ministry of CIVIL AVIATION

(Shri Jayant Sinha)

(a) As informed by IOCL; the of ATF (domestic) since 01.01.2017 at Delhi is at Annexure-l.The pricing of Aviation Turbine Fuel (ATF) was deregulated w.e.f Ist April, 2001 and the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of ATF in line with its international and other market conditions. price price

- (b): The cost of Aviation Turbine Fuel (ATF) constitutes approximately 3550% of Operational cost of an airline in India. However, no analysis in this regard has been carried out by this Ministry-

(c) to (e):The pricing of ATF was deregulated and the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of ATF in line with its price and other market conditions

Air fares are not fixed by the Government as they are determined by the interplay of market forces. Under the provision of Sub Rule (1) of Rule 135, Aircraft Rules 1937, airlines are free to fix reasonable tariff having regard to all relevant factors; including the cost of operation, characteristics of service, reasonable profit and the generally prevailing tariff Air fare so established by the airlines is published on their respective website under the provision of Sub Rule (2) of Rule 135, Aircraft Rules 1937.

Airline remains compliant with the regulatory provisions of Rule-135 as long as the fare charged by them does not exceed the fare established and displayed on their website.

The domestic airline pricing runs in multiple levels (bucket or RBD) which is in line with the practice followed globally: The lower fare in the fare bucket is available for advance booking much earlier which highly discounted fares are being offered by airlines that would entail travelling even during peak season on low fares. As time lapses and date of journey approaches closer; the fare in higher side of fare bucket is made available a8 per the respective airline policy.

(f): As per the provisions of Article 279 A (5) of the Constitution of India (inserted by the Constitution (one Hundred and First Amendment) Act, 2016), the Goods and Services Tax Council shall recommend the date on which Goods and Services Tax shall be levied on petroleum crude; high speed diesel, motor spirit (commonly known as petrol); natural gas and aviation turbine fuel. Till now the GST Council has not finalized the date from which the above five petroleum products would be taxed under GST:

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Annexure for \_Lok Sabha\_Unstarred question 3352 for answer on 15.03.2018 No

| Month             | Price_in Delhilin Rs JKLL   |
|-------------------|-----------------------------|
| March 01, 2018    | 61,681.00                   |
| February 16,2018  | 61,139.00                   |
| February 01,2018  | 60,894.00                   |
| January 01,2018   | 57,460.00                   |
| Decernber 01,2017 | 57,349.00                   |
| Noverber 01,2017  | 54,143.00                   |
| October 01,2017   | 53,045.00                   |
| September 01,2017 | 50,020.00                   |
| August 01, 2017   | 48,110 .00                  |
| July 01, 2017     | 47,013.00                   |
| June 01,2017      | 49,730.00                   |
| 01,2017 May       | 51,696.00                   |
| April 01, 2017    | 51,482.00                   |
| March 01,2017     | 54,293.38                   |
| February 01,2017  | 54,079.63                   |
| January 01, 2017  | 52,540.63                   |

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