Mumbai, Jun 30 (PTI) Freight rates across the country eased in June after transport operators passed on the benefits of excise duty cut on fuel even though various sectors saw a decline in fleet utilisation during the month, a Crisil report said on Thursday.

Crisil's pan-India freight index CRISFrex indicates that freight rates have dropped month-on-month with free cash flow or pre-equated monthly installment going back to April 2022 level, largely due to a drop in fuel prices, CRSIL said.

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CRISFrex captures the changes in freight rates on a sequential basis. Besides, it also tracks the Free Cash Flows (FCF) of transporters on an ongoing basis.

Higher FCF would typically support demand for commercial vehicles.

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The transporters had in May partially passed on the benefit of lower fuel prices after finance minister Nirmala Sitharaman on May 21 announced a cut in excise duty on petrol by a record Rs 8 per litre and that on diesel by Rs 6, helping the oil marketing companies lower the prices of the two automobile fuels.

Mining applications (largely coal) saw a flattish movement in freight rates over the past month, it said.

On the other hand, freight rates for agri products, container, cement, petroleum tankers, textiles and steel saw a mid-single-digit decline, as per Crisil.

"However, fleet utilisation also dropped (in June), which took place at a faster rate in agri products, auto carriers, FMCG/FMCD, petroleum tankers and textiles. The remaining segments such as market load, parcel/loose goods, mining (largely coal) and container saw slower decline in utilisation," Crisil said in the report.

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