A global energy shock from rising tensions in West Asia and a closed Strait of Hormuz has pushed aviation turbine fuel (ATF) prices in India to record highs, crossing Rs 2 lakh per kilolitre. The Centre has intervened to limit a direct pass‑through to domestic airfares, shielding millions of passengers and a fragile aviation sector from a full fare shock.
In the latest revision, ATF rates for some segments jumped 114.5%, with Delhi prices reaching Rs 2,07,341.22 per kilolitre—nearly double last month’s Rs 96,638.14 and well above the roughly Rs 1.1 lakh peak seen in 2022 after the Russia‑Ukraine war. Indian Oil Corporation says the steep rise mainly affects non‑scheduled operators such as private jets, charters and ad‑hoc flights, where fuel costs have risen up to 115% domestically and over 100% for international operations, exceeding $1,000 per kilolitre for the first time in India.
Scheduled commercial airlines, which carry the vast majority of passengers, have been largely insulated. The Ministry of Petroleum and Natural Gas said international benchmarks would have warranted a >100% hike, but public sector oil firms, after consulting the Ministry of Civil Aviation, implemented only a 25% increase—about Rs 15 per litre—for domestic carriers. The balance of the cost has been deferred or shifted.
ATF represents roughly 40–45% of an airline’s operating costs in India, among the highest globally. A full pass‑through of global prices would have strained fragile airline balance sheets and driven sharp ticket price rises, especially after recent fare cap removals. Airlines had already begun revising fuel surcharges in March, with levies reportedly ranging between Rs 150 and $200.
Civil Aviation Minister Ram Mohan Naidu Kinjarapu called the move “a calibrated response to an extraordinary global crisis,” saying the staggered increase should stabilise fares, preserve connectivity and keep cargo moving. Industry leaders welcomed the intervention. SpiceJet chairman Ajay Singh thanked the minister and Civil Aviation Secretary Samir Sinha for leadership and a “moderated adjustment to ATF prices,” saying it would help airlines navigate severe external volatility. An IndiGo spokesperson also thanked the government for insulating domestic travel costs and said the airline was reviewing the April 1, 2026 ATF price impact and would announce revised fuel charges accordingly.
Relief is selective: international carriers refuelling in India and high‑end private aviation face the full increase. The dual pricing reflects a policy choice prioritising mass mobility and economic continuity over premium segments.
The episode highlights India’s structural ATF pricing issues. Despite deregulation in 2001, ATF attracts central excise of 11% and widely varying state VAT—from 0% to as high as 29%—creating large regional cost disparities. Airlines often plan fuel uplift at low‑tax airports to cut costs. Some states and Union Territories, particularly those promoting regional connectivity, have reduced VAT and central excise under the Regional Connectivity Scheme to near zero and 2% respectively. Bringing ATF under GST would require GST Council consensus; states worry about revenue losses, so ATF remains outside GST and pricing stays fragmented.
This is the second monthly increase following a 5.7% rise in March. For now, most passengers may not face immediate ticket hikes, but the pressure has been deferred rather than eliminated. Airlines are reassessing costs and could adjust fuel surcharges in coming weeks. The skies appear stable for now, but the sector remains vulnerable to further geopolitical shocks.
