In a major move aimed at protecting the aviation sector from rising fuel costs, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a one-time ₹10,000 crore Price Stabilisation Fund for domestic airlines. The decision comes amid escalating concerns over soaring aviation turbine fuel prices linked to the ongoing crisis in West Asia.
The newly approved fund is designed to provide financial support through interest-free advances to state-run oil companies. Under the mechanism, aviation turbine fuel prices can be fixed for periods of up to three years, offering greater certainty and stability to airlines operating across the country. The arrangement will be subject to annual reviews, while a repayment mechanism will be activated when fuel prices decline and market conditions improve.
Petroleum Minister Hardeep Singh Puri described the initiative as landmark relief for the aviation industry. He said the measure would help safeguard jobs, prevent operational disruptions, and ensure passenger fares remain stable despite fluctuations in global energy markets. The minister also emphasized that the support would strengthen air connectivity, particularly for remote and underserved regions that depend heavily on reliable airline services.
The approval of the ₹10,000 crore Price Stabilisation Fund marks a significant intervention by the government to cushion the domestic aviation sector against fuel price shocks. By providing a framework for predictable fuel costs, the measure seeks to maintain operational stability, protect employment, support affordable air travel, and preserve critical connectivity across the country during a period of international uncertainty.
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