Tuesday, March 17, 2009


It might sound a bit surprising, but it is fact that poor man’s fuel DIESEL is expensive than the AVIATION TURBINE FUEL (ATF).

It is a different issue that the airfares have not really come down, but the prices of wage goods including that of vegetables has been increasing.

By reducing the price of ATF,the aviation sector has definitely added to their bottom lines. But, would it matter if the fare from Mumbai to Delhi was to be higher by another Rs 500?

Who are the ones who take fights regularly…
Politicians………….paid by the Govt
Businessman……….Dr to expense account.
Tourist……………..Fares (pre-discounted) in India are competitive
Emergency ………..Fares don’t matter
In such case, why is the price of ATF being reduced?

Logically, it would imply that ATF is being subsidized.

Since Sept 2008 price of ATF has been reduced by 11 times.It is understood that Indian Oil, Hindustan Petroleum and Bharat Petroleum revise ATF rates on 1st and 16th of the month(HT 16/03/09).
Incidentally, most of the hotels where the fliers stay are upwards of Rs 15000/ per night stay. In such case, is there a justification in reducing the ATF rates and that too 11 times in about six months though the fares have not been brought down.

Comparative Statement

Diesel price (Rs /ltr)

ATF prices(Rs /ltr)

The difference between the two products speaks for itself.

Periodically, noises are made by the petroleum ministry that the country is losing crores every day as they are subsidizing the LPG and Diesel.
Question they should be asked is obvious, why not raise the price of ATF?

How does the price of Diesel affect us (aam aadmi)
Most of the goods, across the country are transported by trucks, which as you know, run on Diesel. Any reduction in Diesel prices will bring down the prices of vegetables and all other wage goods. Poor man can do with some relief on the price front.
I don’t know about the inflation percentage, yes, MEHNGAI is killing an average man.

Your opinion?
author.......B K Chowla


chiragchamoli said...

I couldn't agree with you more. The trend is generally people owning theses business are more near and dear to the netas' than aam admi.

Deepak said...

I agree with the point, diseal prices can be reduced, I am actually waiting for the new policy to be introduced so that only diseal can be available at subsidized rates for transportation needs and not the luxury cars. Yes, if that comes, that should come with a very good strategy, so that it doesn't increase any more corruption.

Mihir said...

Sir !! good point made here

@deepak in case of such differential pricing policy you and I will be 1st one to misuse even in MegaCity like mumbai. so what can we expect in remote places ?

in my opinion ATF price shouldn't be this low .. and diseal price is good where it stands right now.

ATF ! should probably go @freemarket price with a justified tax rate.

Mihir said...

but ! i am not sure if u r referring to ATF price for local or international flights ?

International carriers dont pay the amount of tax we and local airlines pay on fuel.

and tht actually makes sense, it is export oriented.

so if this price is for international carriers, it is acceptable

sm said...

i agree with this point now a days indian deomcracy has become
democracy run by the rich for the benefit of rich.
other eg. i wanted to add electrictity ,if commmon man do not pay bill of ruppes 100 his electricity is cut instantly more instantly than you can make instant coffee, on other hand one should just check rich people has electricity bills pending in lakhas and more.very good point about diseal and atf prices.
the people who use atf give chanda big chanda/hafta/bribe whatever this can be one of reason there is difference between prices.

Dr. Munish Raizada said...

That is a good comparison. I never knew this distinction! SM raised issue of electricity also. Similarly, the issue of tax collection also smacks of disparity an discrimination. The mega-rich evade taxes, while commoners pay the exact amounts in taxes, because they can not hide the income!
That is the social justice for us!

vijay seth said...

I do think that more statistical data is reqd reg the user of the flights before any conclusion can be arrived at.But by and large on the logic of it I agree with the view that diesel prices need to be revised as also the way the inflation index is arrived because of the changes in the living styles and standards.
Vijay Seth

Kiran said...

I agree with your views here. There is no logical reason for ATF being so low. The first target for price reduction should be diesel.

I also agree with your observations on Deepak's comments about differential pricing. That is the problem in any field - there are so many schemes the Govt can think of which will benefit one and all. Except that they also are easy to misuse and hence the whole scheme goes down the drain!