Civil Aviation Minister K Rammohan Naidu has announced a pragmatic, staggered increase in jet fuel prices for domestic airlines, a move designed to shield passengers from potentially steep fare hikes amidst rising global energy costs and West Asia airspace curbs.
Image used for representational purpose only. Photograph: Toby Melville/Reuters
Key Points
- Civil Aviation Minister K Rammohan Naidu announced a partial and staggered increase in jet fuel prices for domestic airlines to protect passengers from sharp fare increases.
- Aviation Turbine Fuel (ATF) constitutes approximately 40% of an airline’s operational expenses, making price adjustments highly significant for the sector.
- The decision involves a staggered increase of 25% (Rs 15/litre) for domestic airlines, aiming to ease the financial burden on the Indian aviation sector.
- Foreign routes will bear the full market-aligned price of jet fuel, while domestic airlines benefit from the partial increase.
- Airlines are currently facing increased operational costs due to global energy disruptions and airspace restrictions in West Asia, necessitating this intervention.
Civil Aviation Minister K Rammohan Naidu on Wednesday said public sector oil marketing companies’ decision to implement a partial and staggered increase in jet fuel prices for domestic airlines will help in shielding passengers from sharp fare hikes.
Aviation Turbine Fuel (ATF) accounts for around 40 per cent of an airline’s operational costs.
Government Intervention on ATF Pricing
Naidu said that with ATF prices have been deregulated since 2001 and revised monthly based on international benchmarks.
Facing extraordinary pressure due to global energy disruptions and the closure of the Strait of Hormuz, a steep increase of over 100 per cent was anticipated from April 1, he said in a post on X.
“In this challenging context, the decision by PSU Oil Marketing Companies, under the Ministry of Petroleum in consultation with the Ministry of Civil Aviation, to implement only a partial and staggered increase of 25 per cent (Rs 15/litre) for domestic airlines is both pragmatic and forward-looking, while ensuring that foreign routes bear the full market-aligned price,” he said.
Impact on Airlines and Passengers
According to the minister, this calibrated approach will help shield passengers from sharp fare increases, ease the burden on domestic airlines, and support the continued stability of the aviation sector at this crucial juncture.
Naidu also said that he was grateful to Prime Minister Narendra Modi and Petroleum Minister Hardeep Singh for this timely and considerate intervention on ATF pricing.
Airlines are already grappling with higher operational costs due to the West Asia conflict.
Indian carriers are burning more fuel for operating many international flights as they are forced to take longer routes due to airspace curbs in the West Asia region.
