Jet fuel prices more than doubled, govt shields domestic airlines

Mangalore Today News Network

New Delhi, Apr 1, 2026: The government on Wednesday shielded domestic airlines from a sharp increase in jet fuel prices amid global energy supply constraints due to the ongoing war in the Middle East.

On Wednesday morning the state-owned Indian Oil Corporation doubled aviation turbine fuel (ATF) prices in Delhi to Rs 2.07 lakh a kilolitre for April. Hours later, it dropped to Rs 1.04 lakh/kl.

The government said it would only allow a partial increase after it emerged that prices for the domestic market are expected to increase by over 100 per cent from April 1, 2026. This, the government said, is to shield domestic airfares from step hikes.

Therefore, public sector OMCs, or oil marketing companies, in consultation with the Ministry of Civil Aviation, have now implemented only a partial and staggered increase in ticket prices. Domestic airlines will face a limited hike - around 25 per cent or approximately Rs 15 per kl - instead of the full pass-through of global price increases, the government said.

However, airlines operating international routes will bear the full increase, in line with global market-linked pricing.

Aviation Minister Ram Mohan Naidu said this approach will help protect passengers and the aviation sector.

“This calibrated approach will help shield passengers from sharp fare increases, ease the burden on domestic airlines, and support the continued stability of the aviation sector at this crucial juncture,” he said. He also said this will benefit the larger economic picture by ensuring smooth cargo movement and maintaining critical air connectivity for trade and logistics.

The US-Israel war on Iran, which began Feb 28 and swiftly escalated to strikes on energy infrastructure and a blockade on tanker traffic through the Strait of Hormuz, has thrown the global energy market into turmoil. The near-total closure of the key waterway – which ships a fifth of the world’s oil and gas supply - choked exports and prices surged on widening disruption.

The jump in jet fuel - had it been implemented in full - would have been a heavy burden for local airlines, which are already grappling with thin margins.

Other airlines in the region have been similarly hit.

Carriers from Vietnam to New Zealand have had to cancel flights as costs soared, while China - the world’s largest oil importer - has curbed fuel exports to secure domestic supply.