Public Sector oil marketing companies today announced to cut aviation turbine fuel (ATF) prices by 11 per cent following steep decline in crude oil prices in the international market. Crude oil prices fell to a four-year low of around $40 a barrel last fortnight following slow demand due to global financial crisis.

Aviation turbine fuel (ATF) contributes 50% of the operational cost of an airline. ATF demand has fallen by over 5% to 0.37 million tonnes in November as compared to a year-ago period. However, demand for petroleum products rose by 1.6% in November to 10.9 MT.

Earlier, ATF rates were decided on December and it is the seventh consecutive cut in ATF prices since September. However, public and private air lines are unwilling to reduce fares in a line with recent cut in ATF prices. The spokesperson of National Aviation Company of India Ltd (Nacil) said, "Air India had taken the lead in announcing a cut in fuel surcharge less than a fortnight ago. In that cut we had taken into consideration the decrease in fuel prices for the entire month of December. Having said that, price cut is a subject that we keep monitoring."

Aviation industry demands declared good status for ATF which would ensure uniform tax of 4 per cent on fuel throughout the country.