Cabinet approves ₹10,000 cr. ATF price stabilisation fund

ECONOMY – ENERGY

4 JUNE 2026

• Seeking to cushion airlines in thAe backdrop of escalating jet fuel prices due to the West Asia conflict, the Union Cabinet approved a one-time budgetary support of ₹10,000 crore to oil-marketing companies (OMCs) towards a price stabilisation fund.
• The budgetary support would be made available to scheduled airlines in India for both domestic and international operations and would be provided in the form of interest-free advances to OMCs.
• Union Petroleum Minister Hardeep Singh Puri said that the price stabilisation fund would help stabilise (aviation turbine fuel) ATF prices in the backdrop of the West Asia conflict.
• Officials at the Union Petroleum Ministry had informed that State-run OMCs were presently incurring an under-recovery of ₹30 on every litre of ATF meant for domestic scheduled carriers.
• Further, the government observed that international ATF prices surged nearly 2.5 times from ₹60.5 per litre in March 2026 to ₹142 per litre in May 2026.
• ATF prices for domestic scheduled carriers were hiked 9% April 1 this year and have been kept unaltered since then.
• In fact, Air India, along with its low-cost subsidiary Air India Express and Indigo, together cut down 250 daily domestic flights from June amid rising prices of jet fuel. The move was expected to further escalate airfares.
• The government informed that to protect air commuters from a potential sudden price shock, it had capped the ATF prices at ₹75.6 per litre.
• However, the continuing crisis did not offer adequate cushion.
• “ATF accounts for nearly 40% of airline operating costs and during periods of extreme fuel volatility, can constitute up to 60% of total operating expenditure,” it said.