Govt allows airlines direct imports of aviation fuel

In a notification,the government allowed domestic carriers to import jet fuel directly,instead of uplifting it from state-owned oil marketing firms,by applying to the Directorate General of Foreign Trade

Written by ENS Economic Bureau | New Delhi | Published: February 23, 2012 12:33:22 am

In a notification on Wednesday,the government allowed domestic carriers to import jet fuel directly,instead of uplifting it from state-owned oil marketing firms,by applying to the Directorate General of Foreign Trade (DGFT).

The move,airlines had contended,will save them the sales tax — ranging from 4 to 33 per cent — levied by state governments on fuel.

Following the recommendation of a Pranab Mukherjee-led ministerial panel on aviation on February 2,Commerce ministry was asked to permit direct import by or on behalf of domestic carriers as actual users and on actual use basis.

An industry source,on conditions of anonymity said that the move may not actually bring any relief to the cash-strapped carriers. “Unless there is a corresponding infrastructure,it’s not worth it,” the source said. “The moot problem,however,remains the pricing of tickets,which is stagnant across the sector. If they are priced at the same level as five years ago while all other costs have gone up,there is little chance that the airlines will get back to health.” the source added.

A Kingfisher executive had earlier claimed that they are in talks with Reliance Petroleum,and are likely to ink a deal soon.

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