April 1, New Delhi: In response to the turbulent times caused by the Iran war and disruptions in oil supply due to the closure of the Strait of Hormuz, India's Ministry of Petroleum and Natural Gas has taken steps 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 though 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 protect domestic travel costs from the substantial increase in international prices, Public Sector Undertaking (PSU) Oil Marketing Companies, in consultation with the Ministry of Civil Aviation, have implemented only a partial and staggered increase of 25%, i.e., ₹15/litre to domestic airlines. Foreign routes will, however, pay the full increase, in line with global market prices.
IndiGo expressed its gratitude on X, saying, "We would like to thank the Hon'ble Prime Minister for this significant step for all of us. We also convey our heartfelt appreciation to the Ministry of Civil Aviation and the Ministry of Petroleum and Natural Gas, as this marks a meaningful way forward, enabling greater stability for airlines and allowing us to pass on the benefits through more accessible and affordable travel for our customers."
Civil Aviation Minister Ram Mohan Naidu Kinjarapu highlighted the rationale behind the move, noting that ATF prices faced extraordinary pressure due to global energy disruptions and the closure of the Strait of Hormuz. "In this challenging context, the decision by PSU Oil Marketing Companies to implement only a partial and staggered increase of 25% for domestic airlines is both pragmatic and forward-looking, while ensuring that foreign routes bear the full market-aligned price," he said.
The minister added that the calibrated approach will help protect passengers from sharp fare increases, ease the burden on domestic airlines, support the continued stability of the aviation sector, and benefit the broader economy by ensuring smooth cargo movement and vital air connectivity. Both IndiGo and the minister expressed gratitude to PM @narendramodi and Petroleum Minister Shri @HardeepSPuri for this timely intervention.
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