The Indian government has approved a ₹10,000 crore fund to shield airlines from volatility in the price of jet fuel. The one-time budgetary support will allow Oil Marketing Companies (OMCs) to provide Aviation Turbine Fuel (ATF) at stable prices to Indian airlines for both domestic and international operations.
The budgetary support will be in the form of interest-free advances to OMCs through the demands for grants of the Ministry of Petroleum and Natural Gas (MoPNG). The support will be provided to OMCs to facilitate stable ATF pricing for airlines during the ongoing period of exceptional fuel price volatility arising from the West Asia crisis.
Welcoming the decision, airline spokespersons said that the timely intervention is a welcome relief that reflects the government's understanding of the critical role aviation plays in connecting people and enabling economic growth.
The proposed mechanism will provide enhanced stability and predictability in ATF pricing for Indian airlines, enabling better operational and financial planning. It will also shield OMCs from losses arising from volatile and elevated ATF prices during the ongoing West Asia crisis.
