Government mulls excise cut for ATF

In a bid to give some relief to the airline industry, the government is planning to cut excise duty on aviation turbine fuel (ATF) soon. Reacting to this development, airlines stocks were up close to 5 per cent in the morning session on Wednesday.

After the government reduced excise duty on petrol and diesel, it is likely that they may consider a cut in excise duty levied on ATF. This will help airlines make up for some losses that they have been incurring off late due to rising crude oil prices. A depreciating rupee has also hit the financials of airlines badly.

Of the listed aviation companies, Jet Airways and IndiGo import ATF and any reduction in import duty will help these airlines directly. Spicejet and the national carrier Air India do not import ATF.

Many experts, including Ajay Singh of Spicejet, have voiced their concerns regarding rising international crude oil prices and have requested the government to take up some policy measures to help the industry. The is buzz that the central government is seeking Election Commission’s approval to reduce excise duty applicable on ATF, in view of the already announced state elections.

At 10:45, the stock of Jet Airways was quoting Rs. 184.05 up by 4.87 per cent, Spicejet was at Rs. 68.10, up by 4.37 per cent and InterGlobe Aviation was at Rs. 751.00 per share, up by 3.71 per cent, on Wednesday.