Flight Prices To Skyrocket? Jet Fuel Prices Hiked By 8.5% Amid West Asia War, Govt Steps In To Relieve Domestic Carriers

New Delhi: As geopolitical tensions escalate between the United States, Israel, and Iran, the blockade of the Strait of Hormuz is sending shockwaves through the aviation industry. 

However, Domestic travellers have been spared from soaring ticket prices as the government moves to offset the impact of rising global fuel markets.

ATF price hike

In a move aimed at protecting domestic air travel from a sharp global fuel shock, the government has limited the increase in Aviation Turbine Fuel (ATF) prices for domestic airlines to 25%, even as international benchmarks indicated a potential surge of over 100%.

The Ministry of Petroleum and Natural Gas said the decision comes in response to an "extraordinary situation in global energy markets," triggered by the closure of the Strait of Hormuz. To prevent a steep rise in airfares, public sector oil marketing companies, in consultation with the Ministry of Civil Aviation, implemented only a partial and staggered increase.

"ATF prices in India were deregulated in 2001 and are revised on monthly basis based on a formula of international benchmarks. Due to the closure of Strait of Hormuz and extraordinary situation in global energy markets, price of ATF for domestic markets was expected to increase by more than 100% on 1 April," the post read.

"In order to insulate the domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies of the Ministry of Petroleum, in consultation with Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% (only Rs.15/litre) to the airlines," the Ministry further wrote on X.

Why the clarification?

However, the government clarified that international flight operations will not receive similar relief. "Foreign routes will pay for the full increase in ATF prices consistent with what they pay in other parts of the world," the statement added.

Where fuel prices stand?

According to the revised rates effective April 1, 2026, ATF prices across major metro cities have risen notably. 

As per latest data, in Delhi, ATF prices across major metro cities have risen notably. 

In Delhi, prices increased to ₹1,04,927 per kilolitre from ₹96,638.14 in March. 

Kolkata saw a jump to ₹1,09,450 from ₹99,587.14, while Mumbai's rates rose to ₹98,247 from ₹90,451.87. In Chennai, ATF is now priced at ₹1,09,873 compared to ₹1,00,280.49 last month.

International Fuel Prices 

ATF prices for domestic airlines operating international routes have also seen a sharp increase. These stood at Rs 816 per kilolitre earlier but have now surged to Rs 1,690 per kilolitre following the April 1 revision, more than doubling in response to global price trends.

The sharp rise in ATF rates aligns with the broader surge in jet fuel prices globally, driven by geopolitical uncertainties in West Asia, higher crude oil prices and widening refining crack spreads.

Rising ATF prices are set to drive up airfares, as fuel typically makes up between one-third and nearly half of an airline's operating costs. To offset these expenses, carriers generally raise ticket prices, introduce fuel surcharges, cut back on discounts, or even scale down flight schedules. Major Indian airlines like IndiGo and Air India have already responded by implementing fuel surcharges ranging from ₹150 to $200.

ATF prices in India have been deregulated since 2001 and are revised monthly based on international benchmarks.

Petrol Prices

Earlier, the Central government reduced excise duty on petrol to Rs 3 per litre and brought it down to zero for diesel, as per a Gazette notification issued under the provisions of the Central Excise Act, 1944. Additionally, a windfall tax of Rs 21.5 per litre has been imposed on diesel exports.

Meanwhile, the government has maintained that fuel supplies across the country remain stable. The Ministry of Petroleum and Natural Gas, in an official statement, assured that "all retail outlets are operating normally across the country" and that there are "adequate stocks of petrol and diesel available at all petrol pumps." It also urged citizens not to engage in panic buying amid circulating rumours. 

Officials further stated that refineries are operating at high capacity with sufficient crude inventories and that domestic LPG production has been ramped up to meet demand. 

Also Read: Businesses Feel The Pinch As Commercial Gas Prices Soar By Rs 195.5, Has Domestic LPG Followed Suit?