Government Caps Aviation Fuel Price, Announces Rs 10,000 Crore Fund to Keep Air Travel Affordable

New Delhi, June 4, 2026: In a major move aimed at keeping domestic air travel affordable, the central government has announced a cap on aviation fuel prices and approved a Rs 10,000 crore fund to stabilise costs for airlines.

Following a Cabinet meeting, Union Minister Ashwini Vaishnaw said the government has fixed the price of Aviation Turbine Fuel (ATF) for domestic flights at Rs 75.60 per litre. The decision comes amid rising fuel costs triggered by the ongoing crisis in West Asia, which has put pressure on global oil prices.

To prevent airlines from facing the burden of rising ATF costs, the Cabinet has also approved the creation of a Rs 10,000 crore price stabilisation fund. The fund will be used to provide subsidies to airlines through oil marketing companies (OMCs), ensuring fuel prices remain controlled and airfares do not rise sharply.

Ashwini Vaishnaw stated that the government has approved one-time budgetary support exceeding Rs 10,000 crore for OMCs to offer ATF price stabilisation assistance to scheduled Indian airlines operating both domestic and international flights.

The financial assistance will be provided as an interest-free advance through grants from the Ministry of Petroleum and Natural Gas. According to the government, the measure is designed to reduce the impact of rising crude oil prices linked to the Iran crisis and broader geopolitical tensions in the Middle East.

The Centre believes the move will help maintain affordable ticket prices for passengers while protecting airlines from sudden fuel price shocks.

Disclaimer: The information provided in this article is for general informational purposes only. While we endeavor to keep the information up to date and correct, News Setu makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, or reliability of the content. Any reliance you place on such information is strictly at your own risk.