3 days ago
1
Seeking to cushion India’s airlines successful the backdrop of escalating pitchy substance prices due to the fact that of the struggle successful West Asia, the Union Cabinet connected Wednesday (June 3, 2026) approved a one-time budgetary enactment of ₹10,000 crore to oil-marketing companies (OMCs) towards a terms stabilisation fund.
The budgetary enactment would beryllium made disposable to scheduled airlines successful India for some home and planetary operations and would beryllium provided successful the signifier of interest-free advances to OMCs.
Hardeep Singh Puri, Union Petroleum Minister, held that the terms stabilisation money would assistance stabilise ATF prices successful the backdrop of the West Asia conflict.
“The money volition assistance stabilise ATF prices for scheduled Indian carriers and volition forestall disruption of hose operations portion protecting aerial passengers from fare spikes driven by the geopolitical struggle involving respective vigor producers,” work his societal media post.
The budgetary enactment would relation similar a self-sustaining revolving fund.
The Cabinet has sought that erstwhile the planetary ATF prices moderate, the differential magnitude shall beryllium recovered from the oil-marketing companies (OMCs) and returned to the authorities exchequer.
It would beryllium implemented done an MoU betwixt oil-marketing companies and participating airlines that would mandate the second procure ATF lone from OMCs – either for up to 3 years oregon until the beforehand magnitude is afloat recovered.
Officials astatine the Union Petroleum Ministry had informed connected Monday (June 1, 2026) that state-run oil-marketing companies (OMCs) were presently incurring under-recovery of ₹30 connected each litre of ATF meant for home scheduled carriers.
Further, the authorities observed that planetary ATF prices surged astir 2.5 times from ₹60.5 per litre successful March to ₹142 per litre successful May.
ATF prices for home scheduled carriers were hiked 9% April 1 this twelvemonth and person been kept unaltered since then.
In fact, Air India, on with its low-cost subsidiary Air India Express, and Indigo, unneurotic chopped down 250 regular home flights from June amid rising prices of pitchy fuel. The determination was expected to further escalate airfares.
The authorities informed that to support aerial commuters from a imaginable abrupt terms shock, it had capped the ATF prices astatine ₹75.6 per litre. However, the continuing situation did not connection capable cushion.
“ATF accounts for astir 40% of hose operating costs and during periods of utmost substance volatility, tin represent up to 60% of full operating expenditure,” it held.
