According to details shared by the government, international ATF prices have climbed 2.5 times in recent months, rising from ₹60.5 per litre in March 2026 to ₹142 per litre in May 2026.
To shield domestic carriers from the spike, the government has capped ATF prices for domestic operations at ₹75.6 per litre.
Read more: Explained: How the ₹10,000 crore ATF Price Stabilisation Fund will work
The move comes as fuel costs continue to weigh heavily on airline finances. ATF accounts for roughly 40% of an airline’s operating costs, making carriers particularly vulnerable to fluctuations in global oil and fuel markets.
Expressing gratitude for the support to the Scheduled Indian Airlines, IndiGo said, “This timely intervention is a welcome relief that reflects the Government’s understanding of the critical role aviation plays in connecting people and enabling economic growth, while also fostering an environment that empowers airlines to serve passengers better and contribute towards India’s journey as a global aviation hub.”
The ATF Price Stabilisation Fund was among a series of measures approved by the Union Cabinet and the Cabinet Committee on Economic Affairs (CCEA), which cleared projects and schemes worth nearly ₹39,300 crore.
Other approvals included a ₹5,041-crore vehicle scrappage programme for Delhi and an ₹8,301-crore coastal highway project connecting Rameshwaram, Konark and Paradip.
The government said the recent surge in fuel prices has severely affected both airlines and oil marketing companies, prompting the creation of a dedicated stabilisation mechanism.
The newly approved fund will have a corpus of ₹10,000 crore and will be available for both domestic and international aviation operations.
Officials said the fund will operate as a self-sustaining revolving mechanism, allowing support to be extended during periods of elevated fuel prices while maintaining long-term viability.
Union Minister Ashwini Vaishnaw said the ₹10,000 crore fund is intended to address future fuel price volatility and will not compensate oil marketing companies for past under-recoveries.
“Historical under-recoveries incurred by oil marketing companies will not be covered under the ATF Price Stabilisation Fund,” Vaishnaw said, adding that the mechanism is designed to stabilise prices going forward rather than offset earlier losses.
The minister said a dedicated monitoring committee will oversee the fund’s operations, while separate agreements between airlines and oil marketing companies will govern its implementation. He added that international airlines will not be eligible for support under the scheme.
He added that the fund would help mitigate the impact of airspace disruptions caused by Pakistan’s closure of its airspace.
The announcement comes amid continued volatility in global energy markets following disruptions linked to the conflict in West Asia, which have pushed up crude oil and aviation fuel prices worldwide.
Indigo shares rebounded following the announcement to close nearly 2% higher at ₹4,550.10 on Wednesday. The stock has gained about 7% in the last month, while falling more than 15% over the past year.
