Government Approves Financial Aid for Airlines Amid Rising Fuel Costs

In response to soaring Aviation Turbine Fuel (ATF) prices, the Indian government has approved a financial assistance package for Oil Marketing Companies. This initiative, led by Prime Minister Narendra Modi, aims to stabilize fuel costs for airlines amid ongoing global conflicts. With ATF prices nearly doubling in recent months, this support is crucial for maintaining operational stability for both domestic and international flights. The financial aid will be provided as interest-free loans, ensuring that airlines can manage the impact of fluctuating fuel prices effectively. Read on to learn more about the implications of this decision for the aviation sector.

By Narendra Chaudhary Jun 4, 2026, 14:02 IST

Cabinet Decision on ATF Price Support

The Union Cabinet, led by Prime Minister Narendra Modi, has sanctioned a one-time financial assistance package not exceeding Rs 10,000 crore for Oil Marketing Companies (OMCs). This initiative aims to stabilize the prices of Aviation Turbine Fuel (ATF) for scheduled Indian airlines engaged in both domestic and international flights. The financial aid will be provided as interest-free loans to OMCs through the Ministry of Petroleum and Natural Gas's Demands for Grants.

This support is crucial for maintaining stable ATF pricing for airlines amid the current volatility in fuel prices, which has been exacerbated by the ongoing conflict in West Asia. The decision comes in response to a significant increase in ATF prices, which have surged nearly 2.5 times, rising from Rs 60.5 per litre in March 2026 to Rs 142 per litre in May 2026.