India Caps ATF Price Hike at 25% to Avert Aviation Crisis Amid Global Surge

"This morning, there was a very significant announcement by the Ministry of Petroleum and Natural Gas regarding prices of ATF, that is, aviation turbine fuel. The Indian aviation industry has welcomed this important decision and strategic decision by the Government of India to implement this limited increase of 25% on aviation turbine fuel prices for domestic schedule carriers on domestic routes. This measure provides critical relief as global energy markets face unprecedented surges due to the disruptions in West Asia. This intervention will ensure that the domestic operational costs of Indian carriers remain manageable. For the Indian carriers, fuel typically accounts for around 40% of total operating expenses. This move prevents a potential industry-wide crisis," Chuba Ao said.

He further said that the intervention will ensure that the airlines will now calibrate their pricing and pull back fuel surcharges, and noted the impact of military escalation in the Middle East on the global energy market.

"We are all aware that how the ATF pricing works is that on the first of the month, the ATF prices are announced, which are valid for the entire month. Since this crisis in West Asia started and started affecting the global energy market. So the airlines are seeing that the potential increase in prices will be there from the 1st April. Some of the airlines had started levying a fuel surcharge. This intervention, which is announced today, will effectively make sure that either the airlines will now recalibrate their pricing and then pull back the fuel surcharges, or they will calibrate in such a way that the calculation is such that it will not lead to further additional surcharges," the Joint Secretary said.

In a move aimed at protecting domestic air travel from a sharp global fuel shock, the government has limited the increase in Aviation Turbine Fuel (ATF) prices for domestic airlines to 25%, even as international benchmarks indicated a potential surge of over 100%.

The Ministry of Petroleum and Natural Gas said the decision comes in response to an "extraordinary situation in global energy markets," triggered by the closure of the Strait of Hormuz. To prevent a steep rise in airfares, public sector oil marketing companies, in consultation with the Ministry of Civil Aviation, implemented only a partial and staggered increase.

According to the revised rates effective April 1, 2026, ATF prices across major metro cities have risen notably. In Delhi, prices increased to Rs 1,04,927 per kilolitre from Rs 96,638.14 in March. Kolkata saw a jump to Rs 1,09,450 from Rs 99,587.14, while Mumbai's rates rose to Rs 98,247 from Rs 90,451.87. In Chennai, ATF is now priced at Rs 1,09,873 compared to Rs 1,00,280.49 last month.

The latest revision comes against the backdrop of escalating geopolitical tensions in West Asia, involving the United States, Israel and Iran, which has led to a blockade of the Strait of Hormuz, a key global transit route for crude oil and energy supplies.

- ANI