Domestic airlines have decreased the fuel surcharge following a drop in the price of aviation fuel.

The extra charge added to the cost of an air ticket has been reduced from Rs40 to Rs181 depending on distance. The new tariff will come into effect from Wednesday, airline officials said.

On Sunday, Nepal Oil Corporation (NOC) reduced the price of aviation fuel sold to domestic airlines by Rs4 per litre to Rs82 per litre, the lowest in seven and a half years.

This is the first time this year that airlines have cut the fuel surcharge. Carriers are required to revise the fuel surcharge when prices rise or fall by Rs4 per litre under the formula set by the Civil Aviation Authority of Nepal.

Prajwol Thapa, senior marketing manager of Simrik Airlines, said that the Kathmandu-Dhangadhi sector has seen the biggest drop of Rs181. A one-way ticket will now cost Rs12,019, including a Rs3,620 fuel surcharge and a Rs200 airport tax.

Kathmandu-Simara sector, the shortest domestic flight that lasts around 15 minutes, will now cost Rs3,005 including airport tax. The fuel surcharge has been slashed by Rs40 to Rs735.

“It’s not a big reduction, but it will provide some relief to travellers,” said Ghanshyam Acharya, spokesperson for the Airlines Operators Association of Nepal (AOAN). “There would have been a greater reduction if NOC had adopted the automatic pricing system on aviation fuel too.”

In January 2016, the parliamentary International Relations and Labour Committee had also directed the Supplies and Tourism ministries to set prices of aviation turbine fuel as per the market rate. However, the decision has not been implemented so far.

The committee said that NOC had been selling aviation fuel at rates much higher than market prices. Airlines have been passing the burden of fuel price hikes on to travellers in the form of fuel surcharge, taking airfares beyond the reach of a vast section of the population.

International airlines too have been repeatedly expressing concern over the price of aviation fuel in Nepal. They have identified high fuel prices as the single biggest challenge for airlines flying to Nepal.

It has also been reported that aviation fuel in Nepal costs twice as much as other airports in Asia.

Acharya said that all domestic airlines had been recording full occupancy due to poor road conditions, particularly the Mugling-Narayangadh highway. “As it is hard to get air tickets, the slight drop in the fuel surcharge will not have much impact on airlines or passengers.” 

According to Tribhuvan International Airport (TIA), Nepal’s domestic air passenger movement jumped 28.85 percent to 1.75 million, as travellers chose to fly rather than drive over ‘bone-jarring’ national highways.