The Indian government has approved a one-time budgetary support of ₹10,000 crore to provide Aviation Turbine Fuel (ATF) price stabilisation support to Indian airlines for both domestic and international operations.
The support will be in the form of interest-free advances to Oil Marketing Companies (OMCs) through the demands for grants of the Ministry of Petroleum and Natural Gas (MoPNG).
This comes at a time when the aviation sector has been impacted by unprecedented volatility in global ATF prices following the West Asia crisis.
Due to the ongoing West Asia crisis, international ATF prices have surged nearly 2.5 times from ₹60.50/litre in March 2026 to ₹142/litre in May 2026.
The government said that the proposed mechanism will provide enhanced stability and predictability in ATF pricing for Indian airlines, enabling better operational and financial planning.
The arrangement will be implemented through an MoU between participating airlines and OMCs, with the civil aviation ministry and MoPNG as signatories.
A monitoring committee will oversee implementation, claim verification, reconciliation and settlement.
The government said that the measure will help protect and sustain domestic and international air connectivity, ensuring continuity of air services.
The mechanism will also benefit continued air connectivity and facilitate the movement of passengers, high-value cargo, business travellers and tourists, thereby supporting economic activity across sectors.
