Aviation Turbine Fuel (ATF) prices were cut for the second time in September, amid subdued global crude oil prices. On 16 September, rates were revised by state-owned oil retailers to Rs 39,492.53 per kilolitre in New Delhi from Rs 42,447.91 on 1 September.
In Kolkata, it was priced at Rs 44,049.65 per KL, Rs 38,870.31/KL in Mumbai and Rs 40,254.34/KL.
ATF prices are revised twice a month to bring them in line with international oil prices. On Wednesday, Brent crude, a benchmark for international oil rates, was trading at $40.68 a barrel, down over 36 percent on an annual basis.
Traders and experts believe that the outlook for oil prices is bleak as COVID-19 rages on.
Last week, ratings agency ICRA said in a note, "The prolonged shutdown of manufacturing activities in several countries and the subsequent impact of the outbreak on the global economic activity will keep the crude oil prices and thus, the ATF prices low."
The agency's estimates show that the aviation industry's capacity deployment in August, standing at 33 percent (compared to August last year), is rather "a slow uptick despite recommencement of operations over three months ago". However, it was an increase over the 27 percent capacity deployed in July.
"The number of flights departing has also gradually increased from 416 on Day 1 to 1,156 on Day 101 (September 02, 2020). For August 2020, the average daily departures were 930, significantly lower than the average daily departures of 2,846 in August 2019, though better than 780 in July 2020," it added.
Recently, the Ministry of Civil Aviation (MoCA) permitted increasing the capacity to 60 percent for domestic flights with effect from 2 September. However, international flights currently only operate under the Vande Bharat Mission and Air Transport Bubbles.