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New Delhi: In a significant move aimed at protecting the aviation sector from global fuel price fluctuations, the Union Cabinet has approved a one-time budgetary support package of ₹10,000 crore for oil marketing companies (OMCs). The decision comes amid concerns over volatile energy markets triggered by ongoing tensions in West Asia.
The proposal was approved during a Cabinet meeting chaired by Prime Minister Narendra Modi. Union Minister Ashwini Vaishnaw said the assistance will be provided as interest-free advances to OMCs through the Ministry of Petroleum and Natural Gas.
According to the government, the Aviation Turbine Fuel (ATF) price stabilisation mechanism will remain operational for 36 months. The scheme will undergo annual reviews and may continue beyond the initial period if the allocated funds are not fully settled within the timeframe.
Officials believe the arrangement will help bring greater certainty to fuel pricing, allowing airlines to plan operations and finances more effectively.
Fuel is one of the largest operating expenses for airlines. By cushioning the impact of sudden ATF price spikes, the government expects the initiative to reduce pressure on carriers and limit fare fluctuations for passengers.
The measure is also intended to safeguard air connectivity across the country, particularly in remote regions and Tier-II and Tier-III cities, where affordable and reliable air services remain critical.
The government said stable airline operations support jobs across multiple sectors, including airports, maintenance services, tourism, hospitality, logistics and travel businesses.
Officials added that sustained domestic and international connectivity would strengthen trade, tourism and investment while ensuring better utilisation of airport infrastructure developed under various connectivity initiatives, including the regional air connectivity programme.
