Government approves Rs 10,000 crore jet fuel fund for airlines

The Union Cabinet today, June 3, 2026 approved a Rs 10,000 crore Aviation Turbine Fuel (ATF) Price Stabilisation Fund for airlines. The announcement was made by Information Minister Ashwini Vaishnaw.

"The conflict in the Middle East has forced aviation turbine fuel to increase 2.5 times -- Rs 60.5 per litre in March 2026 to Rs 142 per litre in May 2026," said Vaishnaw.

The government has capped aviation turbine fuel at Rs 75.6 per litre for domestic operations. This provides big relief to the airlines.

ATF price stabilisation support will be effective for a period of 36 months with provision for annual review or until the advance amount is fully recovered/settled, whichever is earlier.

Between March and May 2026, International ATF prices increased 2.5 times. During the same period, ATF prices soared from Rs 60.5 per litre in March to Rs 142 per litre in May.

"The fund will help stabilise ATF prices for scheduled Indian carriers and will prevent disruption of airline operations. It will also shield air passengers from fare spikes driven by the global price surge," Vaishnaw stated.

"It will protect 77 lakh jobs dependent on the aviation ecosystem and safeguard substantial public investment in airport infrastructure by keeping airline operations viable. The fund will maintain regional and international connectivity to Europe, North America and Central Asia, given the Pakistan airspace closure," the Union Minister added.

Union Home Minister Amit Shah on X wrote, "The Rs 10,000 crore Price Stabilisation Fund for Scheduled Indian Airlines towards Aviation Turbine Fuel pricing, approved by Union Cabinet, is Modi Ji's shield against global energy crisis. It will buffer airlines from international price instability, ensuring smooth operations."

Once international ATF prices moderate, the differential amount will be recovered from OMCs and returned to the Consolidated Fund of India.

Commenting on the development, IndiGo Airlines' spokesperson 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," he added.