Domestic airfare set to come down
KATHMANDU, Dec 5: Domestic flight is set to be cheaper, thanks to reduction in Aviation Turbine Fuel (ATF) prices by the Nepal Oil Corporation (NOC) on Monday.
As per an agreement between domestic carriers and the government, airfare changes if price of ATF goes up or comes down by at least Rs 4 per liter.
NOC has reduced price of ATF by Rs 8 per liter, citing drop in oil prices in the international market. The Airlines Operators Association of Nepal (AOAN), a group of domestic airlines, is holding a meeting on Tuesday to discuss the issue. It is expected to take a decision to reduce airfare.
The state-owned petroleum monopolist has fixed price of ATF at Rs 86 per liter for domestic airlines. Likewise, it has reduced the price of ATF for international airlines to $750 per 1,000 liters from existing $831 per 1,000 liters. NOC, however, has kept the price of petrol, diesel, kerosene, and cooking gas unchanged.
According to NOC, it has been making profit of Rs 1.94 profit per liter on petrol and Rs 1.65 per liter on diesel. Similarly, it is profiting 74 paisa per cylinder on cooking gas.
Despite pressure from all quarters, NOC is not implementing the automatic pricing mechanism that it had started a year ago. The automatic pricing system would have benefited consumers as Indian Oil Corporation - NOC's sole supplier - send new rate every fortnight.
NOC stopped implementing automatic pricing mechanism after India imposed blockade last year, severely affecting supplies of petroleum products. NOC officials, however, say that they would start implementing automatic pricing system very soon.