Public sector Oil Marketing Companies (OMCs) have executed a significant U-turn regarding the pricing of Aviation Turbine Fuel (ATF) following direct intervention from the Ministry of Petroleum and Natural Gas. In consultation with the Ministry of Civil Aviation, the OMCs have decided to implement only a partial and phased increase of 25%, amounting to approximately ₹15 per liter, for domestic airlines. This decision comes after initial projections suggested a hike of over 100% due to extraordinary conditions in global energy markets. The move is expected to provide much-needed relief to the aviation industry and prevent a sharp escalation in domestic airfares.
Global Energy Volatility and Price Revision Rationale
According to official statements from the Ministry, the closure of the Strait of Hormuz and subsequent disruptions in global energy supply chains had created an exceptional situation, leading to a surge in international fuel prices. ATF prices in India have been deregulated since 2001, with revisions occurring monthly based on international benchmarks. While a massive hike was anticipated on April 1, 2026, the timely intervention by the government has limited the impact on the domestic sector. However, the Ministry clarified that airlines operating on international routes will continue to pay the full price increase, aligning with global market standards observed in other parts of the world.
Revised ATF Rates Across Major Indian Metros
Following the withdrawal of the earlier price announcement, the OMCs have released the revised rates effective from April 1, 2026. In Delhi, the price of ATF stands at ₹1,04,927 per kiloliter. In Kolkata, the fuel is priced at ₹1,09,450 per kiloliter, while in Mumbai and Chennai, the rates have been fixed at ₹98,247 and ₹1,09,873 per kiloliter respectively. These revised figures represent a significant reduction from the initially proposed levels. Since fuel costs account for nearly 40% of an airline's total operational expenditure, this stabilization is critical for maintaining the financial health of domestic carriers.
Government Intervention and Aviation Sector Stability
The Ministry of Petroleum expressed gratitude via social media platform X to Prime Minister Narendra Modi and Petroleum Minister Hardeep Singh Puri for their sensitive intervention, while according to officials, this balanced decision will protect domestic passengers from sudden spikes in air travel costs. The intervention is designed to reduce the economic burden on airlines and ensure the stability of the aviation sector during a volatile period. Also, the move is expected to facilitate the smooth movement of goods and cargo, maintaining essential air connectivity required for trade and logistics across the country.
Clarification on Premium Petrol Price Adjustments
The government also addressed recent reports regarding petrol price hikes, clarifying that the ₹2 per liter increase applies exclusively to premium petrol variants such as XP95, Power95, and Speed. These high-octane performance fuels are niche products, accounting for only 2% to 5% of total petrol sales in India. Their prices are revised every two weeks based on market dynamics. The Ministry emphasized that prices for regular petrol and diesel, which cater to the vast majority of consumers, remain unchanged at every petrol pump across India, despite global price surges of 30-50% in other nations.
Historical Context of Fuel Deregulation in India
The pricing mechanism for ATF in India transitioned to a deregulated regime in 2001, allowing OMCs to adjust rates based on international parity prices. This system ensures that domestic prices reflect global trends while maintaining transparency. The recent intervention highlights the government's role in mitigating the impact of geopolitical tensions on the domestic economy. By capping the hike for domestic operations, the authorities aim to support the post-pandemic recovery of the aviation industry and ensure that air travel remains accessible to the general public while maintaining the integrity of the logistics network.