The Indian government has intervened to shield domestic air travel from a sharp global fuel shock, capping the rise in Aviation Turbine Fuel (ATF) prices for airlines at 25%, even as international benchmarks pointed to a potential surge of over 100%.
The Ministry of Petroleum and Natural Gas stated that this decision was taken in response to an extraordinary situation in global energy markets, triggered by the closure of the Strait of Hormuz. To prevent airfares from rising steeply, public sector oil marketing companies, in coordination with the Ministry of Civil Aviation, implemented only a partial and staggered price increase.
ATF prices in India were deregulated in 2001 and are revised monthly based on international benchmarks. Due to the Strait of Hormuz closure and the resulting disruption in global energy markets, ATF prices for domestic markets were expected to more than double on April 1, the government noted.
By allowing only a partial pass-through, the government aims to keep air travel affordable for passengers while managing the extraordinary pressures on fuel supply chains
