India: Cabinet Approves Rs 100bn for Jet Fuel Price Stabilization Fund

The Union Cabinet has approved a one-time budgetary support of up to Rs 100 billion for oil marketing companies (OMCs) to provide ATF (Jet Fuel) price stabilization for scheduled Indian airlines, as surging fuel prices driven by the ongoing West Asia crisis continue to weigh heavily on the aviation sector.

Announcing the decision, Union Minister Ashwini Vaishnaw said ATF prices have risen sharply due to the conflict in West Asia and that the fund is aimed at cushioning the impact on airlines and passengers. International ATF prices have surged nearly 2.5 times from Rs 60.5 per litre in March 2026 to Rs 142 per litre in May 2026.

Since ATF accounts for nearly 40% of airline operating costs and up to 60% during periods of extreme volatility, the price surge has severely affected both carriers and OMCs.

The support will be extended as interest-free advances to OMCs through the Ministry of Petroleum and Natural Gas, and will be available to all willing scheduled Indian carriers for both domestic and international operations.

While ATF prices have been capped for domestic operations, carriers have continued to purchase fuel for international routes at import parity prices, leaving them exposed to elevated costs.