Prime Minister Narendra Modi chaired the cabinet meeting approving a ₹10,000 crore fund, named the Jet Fuel Price Stabilization Scheme. This initiative ensures domestic aviation fuel rates remain steady despite global market volatility.
The scheme aims to protect airlines from financial stress and prevent sudden fare hikes for passengers. It sets a maximum benchmark rate for aviation turbine fuel (ATF) at ₹75.6 per liter within India. Consequently, airlines can plan operations efficiently knowing fuel costs will not exceed this threshold.
Impact on Airlines and Passenger Fares
Aviation experts note that fuel constitutes 40–60% of airline operating expenses. Controlling ATF rates effectively stabilizes operational costs.
Thus, carriers cannot impose unpredictable fuel surcharges on passengers. While fares will not drastically drop, this intervention safeguards travelers from sudden, excessive price spikes.
Complementary State Measures
Several state governments, including Delhi and Mumbai, have reduced VAT on ATF to 7%. These steps, combined with the central fund, improve affordability for domestic travelers.
Wider Significance
This stabilization fund offers long-term operational certainty for airlines and ensures passengers experience more predictable ticket pricing.
It also signals proactive government support during global energy crises, balancing airline sustainability with consumer protection.
