Jet fuel now cheaper than diesel in India!

Aditya · 2nd February 2015, 13:05

The price of aviation turbine fuel (jet fuel) has been cut steeply. In November 2014, the price of jet fuel fell by 30% and yesterday, by another 11.27%. While the earlier cut made it cheaper than petrol, the last cut has helped it slip below the price of diesel in the country.

In Delhi, Jet fuel is now priced at Rs. 46.51 per litre, while diesel costs Rs. 51.52 per litre. Normally, jet fuel costs more than petrol or diesel, since it has a higher octane rating and is of a higher quality. The price of crude oil has fallen by more than 50% in the last one year. This should have resulted in diesel and petrol costing considerably lesser as well. But, the Government of India has hiked the rate of excise duty on the two fuels four times since November 2014 to keep their prices relatively high.

The Government deregulated the price of diesel in October last year. The price of diesel has fallen by Rs. 10.71 per litre since then. Had there been no hike in excise duty, the price would have cut by a further Rs. 7.50. Similarly, the price of petrol has dropped by Rs. 14.69 per litre since August 2014. Without the excise duty hike, it would have been cheaper by a further Rs. 7.75.

Airlines are unlikely to drop their fares as they could use this drop in price of jet fuel to cut their losses. Jet fuel accounts for over 40% of an airline's operating costs.

Jet fuel now cheaper than diesel in India!-jet-fuel.jpg

Source: NDTV

Image courtesy: airteamimages.com

saket77 · 2nd February 2015, 13:20

Thanks for the report Aditya.

However, this should not be a shocker given that aviation turbine fuel/ jet fuel is more or less same as kerosene.

Thanks!

alpha1 · 2nd February 2015, 15:45

Quote:

Originally Posted by saket77

Thanks for the report Aditya.

However, this should not be a shocker given that aviation turbine fuel/ jet fuel is more or less same as kerosene.

Thanks!

There is however a subtle difference, the kerosene is cross subsidized via higher price of LPG and Gasoline (or has this been removed now?)

Rahul Rao · 2nd February 2015, 16:13

Jet fuel comes into the market for other uses too, and is used to adulterate diesel.
The last time that jet fuel was cheaper than diesel it caused lot of fire after accident cases in which many bus passengers burned to death. Hope this does not start again.

Rahul

2nd February 2015, 13:05	#1
Aditya Team-BHP Support Join Date: Feb 2004 Location: Mumbai Posts: 17,835 Thanked: 77,062 Times View My Garage	Jet fuel now cheaper than diesel in India! The price of aviation turbine fuel (jet fuel) has been cut steeply. In November 2014, the price of jet fuel fell by 30% and yesterday, by another 11.27%. While the earlier cut made it cheaper than petrol, the last cut has helped it slip below the price of diesel in the country. In Delhi, Jet fuel is now priced at Rs. 46.51 per litre, while diesel costs Rs. 51.52 per litre. Normally, jet fuel costs more than petrol or diesel, since it has a higher octane rating and is of a higher quality. The price of crude oil has fallen by more than 50% in the last one year. This should have resulted in diesel and petrol costing considerably lesser as well. But, the Government of India has hiked the rate of excise duty on the two fuels four times since November 2014 to keep their prices relatively high. The Government deregulated the price of diesel in October last year. The price of diesel has fallen by Rs. 10.71 per litre since then. Had there been no hike in excise duty, the price would have cut by a further Rs. 7.50. Similarly, the price of petrol has dropped by Rs. 14.69 per litre since August 2014. Without the excise duty hike, it would have been cheaper by a further Rs. 7.75. Airlines are unlikely to drop their fares as they could use this drop in price of jet fuel to cut their losses. Jet fuel accounts for over 40% of an airline's operating costs. Source: NDTV Image courtesy: airteamimages.com Last edited by Aditya : 2nd February 2015 at 16:51.
	(9) Thanks

2nd February 2015, 13:20	#2
saket77 Distinguished - BHPian Join Date: Dec 2012 Location: Ranchi Posts: 4,396 Thanked: 12,023 Times	Re: Jet fuel now cheaper than diesel in India! Thanks for the report Aditya. However, this should not be a shocker given that aviation turbine fuel/ jet fuel is more or less same as kerosene. Thanks! Last edited by saket77 : 2nd February 2015 at 13:22.
	(3) Thanks

2nd February 2015, 16:13	#4
Rahul Rao Senior - BHPian Join Date: Dec 2013 Location: Pune Posts: 1,132 Thanked: 2,623 Times	Re: Jet fuel now cheaper than diesel in India! Jet fuel comes into the market for other uses too, and is used to adulterate diesel. The last time that jet fuel was cheaper than diesel it caused lot of fire after accident cases in which many bus passengers burned to death. Hope this does not start again. Rahul
	(2) Thanks