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Oil Minister questions state oil firms over ATF pricing

By Religare

Oil Minister questions state oil firms over ATF pricing
Questioning state oil firms for charging about 25 per cent more for jet fuel supplied to Indian carriers, Oil Minister Veerappa Moily has sought an explanation for the oil companies for its opaque pricing of aviation turbine fuel (ATF).

Moily is considering asking the downstream petroleum regulator to monitor ATF rates after Civil Aviation Minister Ajit Sigh alleged that state oil companies are discriminating between domestic and international airlines, government and industry officials said.

"The minister (Moily) has given a week's notice to oil PSUs to explain why he shouldn't ask Petroleum and Natural Gas Regulatory Board to monitor their ATF pricing, which is allegedly non-transparent?" said an official with direct knowledge of the matter.

Earlier, Ajit Singh had asked Moily to bring in more transparency in fixing ATF prices because fuel cost accounts for about 40 per cent of operating cost of domestic air carriers.

"Foreign airlines enjoy transparent pricing mechanism whereas Indian carriers suffer from opaque pricing method known as import parity pricing," a civil aviation ministry official alleged. Oil marketing companies argue that ATF prices are revised every month in line with international prices published by Platts and Argus.

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