Cabinet clears ₹10k-cr fund to offset jet fuel price swings

The Union cabinet has approved a ₹10,000 crore fund to shield airlines from volatility in the price of jet fuel even as it offsets losses that fuel sellers incur.

- Neha LM Tripathi

The one-time budgetary support of ₹10,000 crore will allow Oil Marketing Companies (OMCs) to provide Aviation Turbine Fuel (ATF) at stable prices to Indian airlines for both domestic and international operations.

“The budgetary support will be in the form of interest-free advances to OMCs through the demands for grants of the Ministry of Petroleum and Natural Gas (MoPNG). The support will be provided to OMCs to facilitate stable ATF pricing for airlines during the ongoing period of exceptional fuel price volatility,” the government said.

“We are grateful to the Government of India, Ministry of Civil Aviation, Ministry of Petroleum and Natural Gas and the concerned authorities for announcing Aviation Turbine Fuel (ATF) price stabilisation support to Scheduled Indian Airlines.”

“This timely intervention is a welcome relief that reflects the government's understanding of the critical role aviation plays in connecting people and enabling economic growth, while also fostering an environment that empowers airlines to serve passengers better and contribute towards India's journey as a global aviation hub,” the spokesperson said.

Welcoming the decision and thanking the government, an Air India spokesperson said, “This progressive measure provides a much-needed support to the Indian aviation ecosystem and reinforces the Government's commitment to strengthening connectivity for the people of India, while enabling airlines to serve passengers more effectively.”