Aviation fuel likely at a uniform price across states

Civil Aviation Minister Ajit Singh today said he has requested the Petroleum Ministry to notify aviation turbine fuel (ATF) under ‘declared goods’.

Responding to this proposal by the Aviation Ministry, Petroleum Minister Veerapa Moily said his ministry will take up the matter with the Finance Ministry.

Mr. Moily, after meeting with Ajit Singh, said: "We will jointly make a representation to the Finance Minister."

Notifying ATF under declared goods will make the fuel available at a uniform price across all states as the tax/value added tax (VAT) levied on ATF will be the same for all states. At present, VAT ranges between 5 per cent and 25 per cent.

Talking to the media after the meeting with Mr. Moily, the Aviation Minister said the other issue that was discussed with Mr. Moily was that of the access to the ATF infrastructure of state-owned oil firms in various airports.

Earlier this year, the government allowed the airlines to directly import ATF.  However, the airline companies don’t have the infrastructure for enjoying this benefit. ATF constitutes nearly 40 per cent of the operating cost of any airline.

The decision to import the fuel directly was also taken after the airlines complained that oil firms charge a high price, which coupled with higher taxation by state governments, make it difficult for them to operate.