India cuts jet fuel prices by 5pc on lower demand

India has reduced jet fuel prices by 5pc after demand for the fuel declined by over 90pc in April from a year earlier.

Prices were cut to 21,449 rupees/kilolitre ($280/kl) in Delhi from Rs22,545/kl in early May, according to state-controlled refiner IOC, in line with a fall in international crude prices and domestic demand. Jet fuel prices, which stood at Rs64,324/kl in early February, were cut by 23pc at the start of May from April.

The nationwide lockdown to combat Covid-19 has been extended by two weeks to 31 May, with the current case count exceeding 106,000. The government is looking to boost air travel from June but needs the support of state governments.

Prices for international carriers, which do not pay Indian taxes, slipped to $224/kl from $228/kl at the beginning of May. Jet fuel prices are typically reviewed once a month but have been reviewed twice a month since February. Jet fuel accounts for around 40pc of costs across Indian carriers, twice as much as foreign airlines because of taxes.

By S Dinakar