April 1, New Delhi: Amidst the turbulent times caused by the Iran war and difficulties in oil supply due to the blockage of the Strait of Hormuz, India's Ministry of Petroleum and Natural Gas is attempting to protect domestic airlines from a full surge in fuel prices.
The ministry has limited the increase in Aviation Turbine Fuel (ATF) prices for domestic airlines to 25%, even as global benchmarks indicated a potential increase of over 100% from April 1.
In a clarification, the ministry stated that ATF prices in India have been deregulated since 2001 and are revised monthly based on international benchmarks. It noted that the current "extraordinary situation in global energy markets" had led to expectations of a sharp increase in domestic ATF prices.
The ministry also said that in order to insulate domestic travel costs from the substantial increase in international prices, Public Sector Undertaking (PSU) Oil Marketing Companies of the Ministry of Petroleum, in consultation with the Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% – i.e., only ₹15/litre – to the airlines.
It added that foreign routes will, however, pay for the full increase in ATF prices, consistent with what they pay in other parts of the world.