Cabinet Approves ₹10,000 Crore ATF Price Stabilization

On 3rd June 2026, the Union Cabinet approved a one-time budgetary support package of up to ₹10,000 crore for Oil Marketing Companies (OMCs) to stabilize Aviation Turbine Fuel (ATF) prices and support Indian airlines amid fuel price volatility caused by the West Asia crisis.

Key Points

Objective: To provide ATF Price Stabilization Support and reduce the impact of volatile global fuel prices on Indian airlines and passengers.
Beneficiaries: Scheduled Indian airlines operating domestic and international flights.
Reason for the Move: The ongoing West Asia crisis has led to sharp fluctuations in global aviation fuel prices, affecting airline operations and fare stability.
Implementation Period: The ATF Price Stabilization Support Mechanism will remain operational for 36 months or until the advance amount is fully recovered.
ATF Cost Burden: Aviation Turbine Fuel accounts for around 40% of airline operating costs under normal conditions and can rise to 60% during periods of extreme price volatility.
Additional Government Measures:
- ATF price increases for domestic operations were capped at 25%.
- Landing and parking charges for domestic airlines were reduced by 25%.
- Delhi and Maharashtra reduced VAT on ATF to 7%, benefiting airports that account for nearly 75–80% of India’s ATF consumption.