Overview
- State oil marketing companies raised aviation turbine fuel (ATF) by about 10% and offered a voluntary up‑to‑three‑year fixed rate that translates to roughly Rs 115 per litre in Delhi, with slightly different effective prices in Mumbai and Chennai.
- Under the scheme the government set a free‑on‑board benchmark of Rs 86.32 per litre and will give interest‑free advances to OMCs when international prices exceed that level, recovering any excess when prices fall and returning funds to the Consolidated Fund of India.
- Airlines must choose whether to opt in to lock price certainty at Rs 115 per litre or remain exposed to market‑linked rates, which are currently near Rs 142 per litre for non‑participating carriers.
- Analysts warn the Rs 10,000‑crore pool could be exhausted if high global prices persist and that the eligibility rule requiring carriers to buy fuel only from state OMCs could limit competition and entrench public suppliers.
- Fuel accounts for roughly 40–60% of airline costs, so the move should cut volatility but may still push fares higher in the short term and adds pressure from longer routes after Pakistan closed its airspace for some flights.