ATF Price Stabilisation Scheme Announced, Airlines Get Fuel At Fixed ₹115/Litre For 3 Years

Mumbai: The Centre has introduced a new Rs 10,000-crore Aviation Turbine Fuel (ATF) price stabilisation scheme to help airlines manage rising fuel costs.

Under the voluntary scheme, airlines can buy ATF at a fixed benchmark rate for up to 36 months. After adding airport charges, oil company margins and taxes, the effective ATF price will be around Rs 115 per litre in Delhi, Rs 114.5 per litre in Mumbai and Rs 139 per litre in Chennai.

Benchmark Rates Announced

The Ministry of Civil Aviation has fixed the benchmark ATF price at Rs 86.32 per litre on a free-on-board (FOB) basis for domestic flights. For international operations, the benchmark has been set at Rs 104.49 per litre.

Airlines that choose not to join the scheme will continue to buy fuel at prevailing international market rates, currently around Rs 142 per litre.

Why the Scheme Was Needed?

Global jet fuel prices surged sharply after the West Asia conflict, rising from about Rs 60.50 per litre to as high as Rs 142 per litre in recent months.

ATF is one of the largest expenses for airlines, accounting for nearly 40% of operating costs and even higher during periods of extreme price volatility.

The situation has become more challenging for Indian carriers due to longer flight routes caused by the closure of Pakistan’s airspace.

How the Scheme Will Work?

The government will provide an interest-free advance of up to Rs 10,000 crore to oil marketing companies (OMCs). This will help them supply ATF to participating airlines at the fixed price even when global fuel costs remain elevated.

When international fuel prices decline, the compensation paid to OMCs will be recovered and returned to the Consolidated Fund of India through a prescribed mechanism.

Benefit for Airlines and Passengers

Officials said the scheme is not a subsidy but a temporary stabilisation measure. It is expected to provide airlines with better cost predictability, support air connectivity and reduce the need for sudden airfare hikes caused by fuel price shocks.

For passengers, the biggest benefit will be greater fare stability despite fluctuations in global fuel markets.