InvestorQ : How will the sharp cut in Jet Fuel prices impact airline stocks like Indigo and Spice Jet in the coming weeks?
Anu Biswas made post

How will the sharp cut in Jet Fuel prices impact airline stocks like Indigo and Spice Jet in the coming weeks?

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Neelam Naik answered.
7 months ago
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You are right that the jet fuel (ATF) prices have been slashed by a steep 23% in line with the sharp slump in international oil prices. Interestingly, ATF now costs about one-third of petrol and diesel whose rates continue to be frozen for the 50th day. In fact ATF prices are cut by 23.2% to Rs.22545 per kiloliter. It must be noted that one kiloliter is equal to 1000 litres. As a result, ATF used as a fuel in aeroplanes now costs less than one-third the price of petrol used in cars and two-wheelers. For example in the state of Delhi, one litre of petrol costs Rs.69.59 while jet fuel is priced at Rs.22.54 per litre. Even diesel is priced at Rs 62.29 per litre. This marks steepest cut ever in ATF prices and is the sixth cut since February. Unfortunately, airline companies are not in a position to capitalize as they are still not allowed to fly. While the oil PSUs have regularly revised ATF prices, they have kept petrol and diesel prices on hold since March when the excise was sharply raised on petrol / diesel.

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