India’s ministry of civil aviation is to recommend that oil companies be asked to share their infrastructure with airlines, to help facilitate direct import of jet fuel by airlines in a drive to cut costs.
A senior official at the ministry said: “We are looking at measures by which oil companies can share their infrastructure for transporting the fuel. This can be done at an agreed cost.”
Taxes on jet fuel in India are among the highest in the world and are considered a major reason for the mounting losses of airlines in the country.
The value added tax levied on jet fuel ranges from 4% to 30%, depending on each state. If an airline can import fuel directly, it would only have to pay customs and countervailing duties, saving on state levies.