Modi government to review ₹10,000cr ATF price stabilization scheme
What's the story
The Indian government is considering a review of its aviation turbine fuel (ATF) price stabilization scheme, as per CNBC-TV18. The move comes as airlines have shown limited interest in the scheme, despite rising ATF prices. A ₹10,000 crore fund was allocated for the 36-month initiative approved by the Union Cabinet in June 2026.
Scheme details
What did the scheme offer?
The ATF price stabilization scheme was introduced to help airlines deal with fluctuations in fuel prices.
It allows them to buy fuel from oil marketing companies (OMCs) at a fixed rate.
However, the scheme's attractiveness has been hampered by a major condition: airlines opting for this facility must agree to buy ATF from OMCs at a fixed price for three years.
Market impact
Why airlines are not interested in the scheme
The scheme has become less appealing to airlines as market-linked ATF prices have fallen below the fixed rate.
This was particularly true when falling ATF prices decreased the incentive for airlines to lock in a fixed price for three years.
Now, with limited interest from carriers, the government is considering a review of this scheme and its structure in consultation with airlines and OMCs.