Daily News Analysis ‘Aviation Turbine Fuel (ATF) ’ : 5 June

Why in News: 

• The Government has announced a price stabilisation mechanism for Aviation Turbine Fuel (ATF) to provide airlines with greater fuel price certainty.

Key Facts: Nature, Use and Importance of ATF

• ATF (Aviation Turbine Fuel) is a specialized petroleum-based fuel used in jet aircraft and turbine-engine airplanes.
• It is a refined product obtained from crude oil.
• ATF is similar to kerosene but has stricter quality and safety specifications.
• It is the largest operating cost component for most airlines.

Major Characteristics

• High energy content for long-distance flights.
• Low freezing point, enabling operations at high altitudes and low temperatures.
• High thermal stability and safety standards.
• Suitable for modern gas-turbine aircraft engines.

Pricing and Taxation

• ATF prices are influenced by:
  • International crude oil prices.
  • Exchange rate movements.
  • Refining and transportation costs.
  • Taxes and airport-related charges.
• In India, ATF attracts VAT (Value Added Tax) imposed by States.
• It also includes airport-related levies and other charges.
• ATF is currently outside the Goods and Services Tax (GST) regime.