Rising tensions in West Asia and a closure of the Strait of Hormuz have triggered a global energy shock that pushed aviation turbine fuel (ATF) prices in India to record levels, breaching Rs 2 lakh per kilolitre. To prevent a direct, sudden jump in ticket prices, the Centre stepped in to blunt the immediate impact on domestic passengers and a fragile aviation sector.
In the latest revision, ATF rates for some categories surged 114.5%. Delhi rates reached Rs 2,07,341.22 per kilolitre—almost double last month’s Rs 96,638.14 and well above the roughly Rs 1.1 lakh peak seen after the 2022 Russia‑Ukraine conflict. Indian Oil Corporation said the steep rise has hit non‑scheduled operators hardest: private jets, charters and ad‑hoc flights have seen domestic fuel costs climb up to 115% and international operation refuelling in India rise over 100%, with prices exceeding $1,000 per kilolitre for the first time in India.
Scheduled commercial carriers, which carry the bulk of passengers, have been largely insulated. Officials said international benchmarks would have justified a greater‑than‑100% hike, but public sector oil companies—after consulting the Ministry of Civil Aviation—implemented only a 25% increase for domestic carriers, roughly Rs 15 per litre. The remaining cost increase has been deferred or absorbed elsewhere.
ATF accounts for about 40–45% of an airline’s operating costs in India, among the highest shares globally. A full pass‑through of the global price spike would have strained already stretched balance sheets and forced sharp ticket price rises, especially after recent fare cap removals. Airlines had already started revising fuel surcharges in March, with reported levies ranging between around Rs 150 and $200.
Civil Aviation Minister Ram Mohan Naidu Kinjarapu called the decision ‘‘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,’’ while an IndiGo spokesperson said the airline appreciated the insulation of domestic travel costs and was reviewing the April 1, 2026 ATF price impact before announcing any revised fuel charges.
Relief is selective. International carriers refuelling in India and high‑end private aviation will face the full increase. The dual pricing approach reflects a policy choice to prioritise mass mobility and economic continuity over premium segments.
The episode also underscores India’s structural ATF pricing challenges. Despite deregulation in 2001, ATF remains subject to central excise of 11% and widely varying state VATs—from 0% to as high as 29%—creating large regional cost disparities. Airlines often plan fuel uplift at low‑tax airports to reduce expense. Some states and Union Territories, aiming to promote regional connectivity, have cut VAT and central excise under the Regional Connectivity Scheme to near zero and 2% respectively. Bringing ATF under GST would need GST Council consensus; states fear revenue losses, so ATF remains outside GST and pricing fragmented.
This is the second monthly increase after a 5.7% rise in March. For now, most passengers may avoid immediate ticket hikes, but the cost pressure has been deferred rather than removed. Airlines are reassessing their cost structures and could adjust fuel surcharges in the coming weeks. The skies may be calm for the moment, but the sector remains exposed to further geopolitical shocks.
