Seeking to cushion India’s airlines in the backdrop of escalating jet fuel prices because of the conflict in West Asia, the Union Cabinet on Wednesday (June 3, 2026) approved a one-time budgetary support of ₹10,000 crore to oil-marketing companies (OMCs) towards a price stabilisation fund.

The budgetary support would be made available to scheduled airlines in India for both domestic and international operations and would be provided in the form of interest-free advances to OMCs.

Hardeep Singh Puri, Union Petroleum Minister, held that the price stabilisation fund would help stabilise ATF prices in the backdrop of the West Asia conflict.

“The fund will help stabilise ATF prices for scheduled Indian carriers and will prevent disruption of airline operations while protecting air passengers from fare spikes driven by the geopolitical conflict involving several energy producers,” read his social media post.

The budgetary support would function like a self-sustaining revolving fund.

The Cabinet has sought that once the international ATF prices moderate, the differential amount shall be recovered from the oil-marketing companies (OMCs) and returned to the government exchequer.

It would be implemented through an MoU between oil-marketing companies and participating airlines that would mandate the latter procure ATF only from OMCs – either for up to three years or until the advance amount is fully recovered.

Officials at the Union Petroleum Ministry had informed on Monday (June 1, 2026) that state-run oil-marketing companies (OMCs) were presently incurring under-recovery of ₹30 on every litre of ATF meant for domestic scheduled carriers.

Further, the government observed that international ATF prices surged nearly 2.5 times from ₹60.5 per litre in March to ₹142 per litre in May.

ATF prices for domestic scheduled carriers were hiked 9% April 1 this year and have been kept unaltered since then.

In fact, Air India, along with its low-cost subsidiary Air India Express, and Indigo, together cut down 250 daily domestic flights from June amid rising prices of jet fuel. The move was expected to further escalate airfares.

The government informed that to protect air commuters from a potential sudden price shock, it had capped the ATF prices at ₹75.6 per litre. However, the continuing crisis did not offer adequate cushion.

“ATF accounts for nearly 40% of airline operating costs and during periods of extreme fuel volatility, can constitute up to 60% of total operating expenditure,” it held.

Aviation Turbine Fuel (ATF) prices were hiked by over 3% and commercial LPG rates by ₹15.50 per cylinder on Wednesday (October 1, 2025) as oil firms revised fuel prices in line with global benchmarks.

Jet fuel (ATF) price was increased by ₹3,052.5 per kilolitre, or 3.3%, to ₹93,766.02 per kl in the national capital — home to one of the busiest airports in the country, according to state-owned fuel retailers.

The increase comes on the back of a 1.4% (₹1,308.41 per kl) reduction last month.

The price hike will increase the burden on commercial airlines, for whom fuel makes up almost 40% of the operating cost.

No immediate comments could be obtained from the airlines on the impact of the price change.

The ATF price in Mumbai was hiked to ₹87,714.39 per kl from ₹84,832.83 per kl, while those in Chennai and Kolkata were increased to ₹96,816.58 and ₹97,302.14 per kl, respectively.

Rates differ from city to city, depending on the incidence of local taxes such as VAT.

Alongside, oil firms increased the price of commercial LPG used in hotels and restaurants by ₹15.50 per 19-kg cylinder. Commercial LPG now costs ₹1,595.50 in the national capital.

The hike follows six-monthly reductions, the last being of ₹51.50 on September 1. In the six reductions, prices were cut by ₹223 per bottle since April.

Oil prices have firmed since the last revision mainly because of geopolitical reasons, necessitating the changes in retail rates.

Prices of ATF and LPG differ from state to state, depending on the incidence of local taxes, including VAT.

The rate of cooking gas used in domestic households, however, remained unchanged at ₹853 per 14.2-kg cylinder. The price of the domestic LPG was hiked by ₹50 per cylinder in April.

State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) revised prices of ATF and cooking gas on the first of every month based on the average price of benchmark international fuel and foreign exchange rate.

Domestic rates of petrol and diesel continue to remain frozen. Rates were cut by ₹2 per litre in mid-March last year, ahead of the general elections. Petrol costs ₹94.72 a litre in Delhi, while diesel is priced at ₹87.62.

Aviation turbine fuel (ATF) prices were hiked 3% on Friday (August 1, 2025), while the price of commercial LPG cylinders was reduced ₹33.50, in line with fluctuations in international benchmark rates.

Jet fuel (ATF) price was increased by ₹2,677.88 per kilolitre, or 2.9%, to ₹92,021.93 per kl in the natonal capital — home to one of the busiest airports in the country, according to state-owned fuel retailers.

The increase comes on back of a steep 7.5% (₹6,271.5 per kl) hike last month, adding to operating cost of airlines.

The hike in July came after three monthly reductions starting April. In all, prices had been cut ₹12,239.17 per kl in the three reductions. The subsequent increases (₹8,949.38 per kl) has wiped away almost three-fourths of the gains.

The increase in ATF price is in line with the spurt in international oil rates that followed geopolitical tensions and trade wars.

This increase will add to the burden on commercial airlines, for whom fuel makes up for almost 40% of the operating cost.

No immediate comments could be obtained from the airlines on the impact of the price hike.

The ATF price in Mumbai was hiked to ₹86,077.14 per kl from ₹83,549.23, while those in Chennai and Kolkata were increased to ₹95,512.26 and ₹95,164.90 per kl, respectively.

Rates differ from city to city, depending on incidence of local taxes such as VAT.

Alongside, oil firms reduced the price of commercial LPG by ₹33.50 per 19-kg cylinder. Commercial LPG now costs ₹1,631.50 in the national capital.

This is the fifth straight reduction in commercial LPG rates. Prices were last reduced by ₹58.5 per 19-kg cylinder on July 1. Prior to that, prices were reduced by 24 on June 1, by ₹14.50 cut on May 1, and a ₹41 per cylinder reduction was effected on April 1. In all, prices have been cut by ₹171.5 per bottle since April.

While oil prices have been on the boil, benchmark LPG rates have softened because of low demand during summer months.

Prices of ATF and LPG differ from State to State, depending on the incidence of local taxes, including VAT.

The rate of cooking gas used in domestic households, however, remained unchanged at ₹853 per 14.2-kg cylinder. The price of the domestic LPG was hiked by ₹50 per cylinder in April.

State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) revised prices of ATF and cooking gas on the first of every month based on the average price of benchmark international fuel and foreign exchange rate.

Domestic rates of petrol and diesel continue to remain frozen. Rates were cut by ₹2 per litre in mid-March last year, ahead of the general elections. Petrol costs ₹94.72 a litre in Delhi, while diesel is priced at ₹87.62.