Airliners warn govt: Roll back ATF price hike or raise airfare

Kathmandu, May 14:

Airline operators have asked the government to roll back its decision of hiking air turbine fuel (ATF) prices, stating that there is no logic for such an immediate increase. They have also warned that the airfare would be increased, if the government doesn’t withdraw its decision.

Airlines Operators Association of Nepal (AOAN), the representative organisation of Nepali airline companies, has strongly condemned Nepal Oil Corporation’s (NOC) yesterday’s move to hike ATF prices.

“NOC has always been raising ATF prices without considering its economic implications to airline industry and air passengers,” said AOAN president Bijaya Shrestha, adding that the hike is completely illogical, as Nepal Oil Corporation has a good profit margin in sales of the aviation fuel.

Yesterday, NOC suddenly hiked the ATF prices by Rs 10 per litre or 12.5 per cent for domestic use and $230 per 1000 litre or 21 per cent for international operations.

NOC has cited the mounting losses incurred due to huge price disparity and skyrocketing fuel

prices globally.

According to Shrestha, additional fuel surcharges following the latest ATF price hike has been already worked out and details have been submitted to Civil Aviation Authority of Nepal (CAAN) for approval. He, however, didn’t disclose the details.

“If the government sticks to its decision, the airliners have no alternative than to pass the burden to passengers by increasing the air fare,” he said, adding that the government must roll back its decision for the benefit of industry as well as air passengers.

According to NOC spokesperson Mukunda Dhungel, the state-owned petroleum supply monopoly has been incurring a whopping loss of Rs 1.67 billion a month as per the revised price forwarded by its sole supplier — Indian Oil Corporation (IOC) on May 2.

Dhungel further said that the outstanding dues of NOC has crossed already Rs 13 billion including six billion rupees loans it had taken from the government at various times, Rs 2.15 billion from the commercial banks, Rs 2.50 billion from the Citizen Investment Trust (CIT) and Employees Provident Fund (EPF).

The outstanding dues that Nepal Oil Corporation’s owes to Indian Oil Corporation currently stands at Rs 2.50 billion.