HomeBusinessWhy Jet Fuel For the Aeroplane is Cheaper than Petrol and Diesel?

Why Jet Fuel For the Aeroplane is Cheaper than Petrol and Diesel?

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Why Jet Fuel is Cheaper than Petrol? A wonderful trend has been seen regarding the prices of petrol and diesel. They have started growing so fast and so much that there is no news anymore. Yes, if the price does not increase someday, then it definitely becomes news. Amidst the rising prices of petrol and diesel, recently news came which shocked the people.

There was news that the prices of petrol and diesel have increased more than jet fuel i.e. aeroplane oil. Is it really so? If yes, then why the oil from which aeroplanes run is selling cheaper than the oil in cars and motorcycles?

What is ATF?

Airplane or car-bike, one thing is common in them. Everyone needs an engine to run. This engine runs on some fuel. Engines run mostly on oil. This oil is also called fossil fuel in the language of science. They have their reserves under the ground. from where they are extracted. The economy of many countries of the Middle-East and Africa is cutting silver on its own.

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Crude oil comes out from the oil reserves present in these countries. The same crude oil which we usually call ‘kerosene’ or ‘kerosene’. It is the most basic form of ground oil, which consists of several compounds linked to hydrogen and carbon. There is also a small amount of nitrogen and sulfur. Simply put, there are many types of impurities in crude oil. Because of this, a lot of smoke is also produced due to their burning, which is harmful for us and the environment.

It is refined only to reduce these bad properties of crude oil. This is where the role of oil companies begins. Like you have IOC, BP ​​and Reliance etc. These refineries buy crude oil from the international market and refine it and make it available in the market. While refining crude oil, jet fuel and petrol are separated.

Actually, both Jet Fuel i.e. Aviation Turbine Fuel (ATF) and Gasoline (Gasoline) are the same thing. In technical language, petrol is called gasoline. Petrol is known as gasoline in the countries of America and Europe. Usually in America, when people fill petrol in the car, it is called filling gas. Petrol pump is also called gas station.

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ATF is one of the most basic byproducts of crude oil. There are mainly two types of oil falling in the airplane. Jet A and Jet B. According to their quality and freezing point, they are divided into two categories. Jet B fuel is used for special occasions such as military or in extremely bad weather. Jet B fuel is less refined than Jet A fuel.

The crude oil buying system in a very easy way. To understand this, read the article given below.

Why Jet Fuel is Cheaper than Petrol

You must be wondering why petrol and diesel are so expensive when everything is almost the same. The reason for this is the tax levied on them. In terms of price, the prices of airplane oil and petrol and diesel are almost the same. But the hefty tax on them creates a difference. It is not that airborne oil is not taxed. But think and see whose use is more. You got it right, lakhs of vehicles are running on petrol and diesel. In such a situation, this is the real source of earning. The government and oil companies earn big money by imposing heavy taxes on them.

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The government also does not impose more tax on ATF used in airplanes because they do not earn much, but the fare of other air traffic increases. This creates an uproar in the airline industry. ATF prices fluctuate here and there that the aviation ministry also swung into action. In August itself, the aviation minister had appealed to 22 states to reduce VAT (Value Added Tax or VAT) on ATFs so that air traffic prices do not increase.

In this regard, he had also praised Kerala, Andhra Pradesh, Meghalaya, Nagaland, Sikkim and Telangana, which had reduced the VAT on their ATF by one percent or even less. For example, the government of Kerala had reduced the 25 per cent tax on airplane fuel to 1 per cent.

Jet Fuel Price in India

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Now consider the price game

Talking about the fuel price, the central excise duty on ATF is 11 percent. Apart from this, states levy VAT according to their own. That is, different states have different VAT. For example, Gujarat has the highest VAT of 30 per cent on ATF. In Tamil Nadu and Bihar, 29 percent and in Karnataka 28 percent VAT is being charged. The difference between the states can also be seen clearly in the prices of ATF given on the website of Indian Oil Corporation.

ATF is not measured in liters but in kilolitres. 1 kiloliter means 1 thousand liters. Accordingly, the price of Aviation Turbine Fuel in Delhi is Rs 79,020 per thousand liters i.e. around Rs 79 per liter. In Kolkata it is a little more than Rs 83 per liter.

Jet Fuel Price in India

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The prices of petrol and diesel are fixed at 6 am every day according to the international market. This is where the oil companies and the government earn their money. Four types of expenses and taxes are made available to us on petrol and diesel. These are as follows,

  1. Processing charge for transporting crude oil to dealer
  2. Excise duty of Central Government
  3. Commission of dealer running petrol-diesel pump
  4. VAT imposed by state governments

Central and state governments are charging about 54-60 per cent tax on the petrol and diesel reaching us. The central government charges Rs 32.80 and Rs 31.80 excise duty on petrol. State governments charge VAT on their own. For example, the Delhi government puts in its pocket Rs 23 per liter of petrol and Rs 13 on diesel.

The government always gives only one argument to increase the price, that the prices of petrol and diesel are in the hands of the market and they cannot do anything. That is, according to the international price, the oil companies themselves decide the price.

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But the truth is also that taxes account for more than 50 percent of the price of petrol and diesel, which the central or state governments are not taking the name of reducing. So this time when oil prices increase, then understand that along with oil companies, governments are earning a lot.

Akash Kumar Mishra
Akash Kumar Mishra
Akash Kumar Mishra is the CO-Editor at Spot News 18. He is very passionate about His Work and Loves to Write about Technology Topics.

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