Government Caps Aviation Fuel Price Increase Amid Global Energy Crisis

In response to the ongoing global energy crisis, the Indian government has limited the increase in aviation turbine fuel prices for domestic airlines to 25%. This decision comes after initial reports indicated a potential hike of over 100% due to disruptions caused by conflicts in West Asia. The cap aims to protect domestic travel costs while international routes will face full price increases. The situation has arisen from significant geopolitical tensions affecting energy supplies, particularly through the Strait of Hormuz, a vital maritime route. As global oil prices surge, the implications for the aviation sector are profound, raising questions about future travel costs.

By Narendra Chaudhary Apr 1, 2026, 13:05 IST

Price Increase Limited to 25%

On Wednesday, the Union government announced a cap on the rise of aviation turbine fuel prices for domestic airlines, limiting it to 25%. This decision follows a significant hike in jet fuel prices earlier in the day, attributed to disruptions in energy supplies due to ongoing conflicts in West Asia.

Initially, the price list from Indian Oil, the largest public sector oil marketing company in India, indicated an increase of approximately 115% for certain flight categories, as reported by a news outlet.

In response to the initial reports of steep price hikes, the petroleum ministry clarified that while a more than 100% increase was anticipated due to the 'extraordinary situation' in the global energy market, only a staggered increase of 25% (equivalent to Rs 15 per litre) would be applied to domestic airlines.

This cap aims to shield domestic travel costs from the drastic rise in international fuel prices, as stated by the ministry. The decision was made in collaboration with the Ministry of Civil Aviation and state-owned oil marketing companies.

For international routes, airlines will be required to pay the full increase in aviation turbine fuel prices, consistent with global rates.

Indian Oil, Bharat Petroleum, and Hindustan Petroleum adjust the prices of aviation turbine fuel and liquefied petroleum gas on the first day of each month based on international benchmarks and currency exchange rates.

With the new pricing, jet fuel in Delhi will now cost Rs 1.04 lakh per kilolitre, up from Rs 96,638 in March. In Mumbai, the price will rise to Rs 98,247 from Rs 90,451, according to Indian Oil's latest listing.

Prices for aviation turbine fuel differ across India due to varying state levies.

Impact of Global Energy Crisis

The price cap was introduced as energy supplies to India have faced disruptions since the conflict in West Asia erupted on February 28. Iran has effectively blocked the Strait of Hormuz, a crucial maritime route for international commercial vessels, through which about 20% of the world's petroleum supply flows.

Due to these disruptions, global oil prices have surged. On Wednesday, the benchmark Brent crude was trading at $105 per barrel, a significant increase from $78 per barrel on February 27, just before the conflict began.

The West Asia conflict commenced when Israel and the United States launched an attack on Iran on February 28, citing Tehran's actions as a threat to Israel's existence. The U.S. has historically acted as a guarantor of Israel's security. In retaliation, Iran has targeted Israel and U.S. military bases in the region, as well as major cities in Gulf nations.

Israel has expressed concerns that Iran is nearing the capability to obtain a nuclear weapon, which could shift the regional security dynamics. Iran, however, insists that its nuclear program is intended for peaceful purposes.