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Govt Shields Airlines From Fuel Price Spike, Airfares To Stay Stable

The Indian government has intervened to shield the domestic aviation sector from a steep global surge in aviation turbine fuel (ATF) prices. Public sector oil companies, in consultation with the Civil Aviation Ministry, have implemented only a partial and staggered price increase for domestic airlines, limiting the hike to around 25% instead of over 100%. This calibrated move aims to protect passengers from sharp airfare increases and ease the burden on airlines. The decision contrasts with the full market-linked price increase being borne by international carriers.

Key Points: Govt Limits Jet Fuel Hike, Domestic Airfares Unlikely To Soar

  • Partial ATF hike for domestic airlines
  • Full price pass-through for international carriers
  • Aim to protect passengers from fare spikes
  • Support for aviation sector stability
2 min read

Govt shields domestic aviation sector from jet fuel spike, airfares likely to remain stable

Government intervenes to cushion domestic airlines from a steep ATF price surge, implementing a partial hike to keep airfares stable for passengers.

"This calibrated approach will help shield passengers from sharp fare increases - Ram Mohan Naidu"

New Delhi, April 1

The government on Wednesday said that domestic airfares are unlikely to see a sharp rise as it has cushioned the impact of a steep surge in aviation turbine fuel prices by allowing only a partial increase for domestic airlines.

According to the Ministry of Petroleum and Natural Gas (MoPNG), ATF prices in India -- deregulated since 2001 -- are revised monthly based on international benchmarks. Given the current geopolitical situation, ATF prices for domestic markets were expected to rise by more than 100 per cent from April 1.

However, in a bid to shield domestic air travel costs from a steep spike, public sector oil marketing companies (OMCs), in consultation with the Ministry of Civil Aviation, have implemented only a partial and staggered increase.

Domestic airlines will face a limited hike of around 25 per cent, translating to approximately Rs 15 per litre, instead of the full pass-through of global price increases, the government said.

In contrast, airlines operating on international routes will bear the full increase in ATF prices, in line with global market-linked pricing.

Union Civil Aviation Minister Ram Mohan Naidu said the calibrated approach would help protect passengers and the aviation sector.

"This calibrated approach will help shield passengers from sharp fare increases, ease the burden on domestic airlines, and support the continued stability of the aviation sector at this crucial juncture," he said.

He added that the move would also benefit the broader economy by ensuring smooth cargo movement and maintaining critical air connectivity for trade and logistics.

The decision comes amid a sharp escalation in global crude oil prices due to ongoing tensions in West Asia. Disruptions around the Strait of Hormuz - a critical artery for global energy trade - have pushed up fuel costs worldwide.

Prices of aviation turbine fuel (ATF), or jet fuel, in the national capital have seen an increase, though not as steep as initially reported, after a clarification from Indian Oil Corporation.

According to the oil major, ATF prices have risen by about 8.5 per cent, not 115 per cent as previously indicated. The current price of jet fuel stands at around Rs 1.04 lakh per kilolitre.

- IANS

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Reader Comments

R
Rohit P
Finally some relief! I was worried about my upcoming trip to Goa. Fares were already high. This intervention is much needed. Hope the airlines don't find other ways to charge us extra though.
A
Aman W
While protecting passengers is good, who is bearing the cost? The OMCs are public sector units. If they are absorbing losses, isn't that ultimately taxpayer money? The article doesn't clarify the financial mechanics. A bit more transparency would be helpful.
S
Sarah B
Smart policy. In a country as vast as India, keeping air connectivity affordable is crucial for business and tourism. The focus on cargo movement is also key—our exports need all the support they can get in this global climate.
V
Vikram M
The clarification about the 8.5% vs 115% hike is important. Creates less panic. But the international airlines paying full price might increase ticket costs for NRIs and students flying abroad. That's a hidden impact.
N
Nisha Z
Good step for now, but we need a long-term solution. Our dependence on imported fuel makes us vulnerable to every global crisis. Hope this accelerates investment in sustainable aviation fuels and other alternatives. Jai Hind!

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