India has established a fixed benchmark price for aviation turbine fuel (ATF) at Rs 115 per litre under a new voluntary stabilisation scheme, according to government officials. The plan aims to reduce price volatility for airlines by setting a predictable fuel cost structure.
Details of the New ATF Plan
Under the voluntary scheme, participating airlines will pay a fixed free-on-board (FOB) benchmark price along with airport charges, oil company margins, and applicable taxes. This results in an effective selling price of approximately Rs 115 per litre in Delhi, Rs 114.5 in Mumbai, and Rs 139 in Chennai. The government hopes this initiative will provide financial stability to the aviation sector, which has been grappling with fluctuating fuel prices.
Impact on Airlines and Consumers
The fixed benchmark is expected to help airlines better manage their operational costs, potentially leading to more stable airfares for passengers. However, the scheme is voluntary, and airlines must opt in to benefit from the predictable pricing. Industry experts believe this could encourage long-term planning and investment in the sector.
The announcement comes as part of broader efforts to support the aviation industry, which has faced challenges from global oil price swings and domestic demand fluctuations. Officials noted that the benchmark will be reviewed periodically to align with market conditions.
