The Union Cabinet on Wednesday approved a one-time price stabilisation fund of ₹10,000 crore to help Indian airlines manage soaring aviation turbine fuel (ATF) prices amid the ongoing West Asia conflict. 

The support will be provided to oil-marketing companies (OMCs) in the form of interest-free advances through the Ministry of Petroleum and Natural Gas. The OMCs, in turn, will use the fund to provide ATF price stabilisation support to Indian carriers operating domestic and international flights. 

According to a government statement, the mechanism is intended to provide airlines with “enhanced stability and predictability in ATF pricing” during a period of exceptional fuel-price volatility. 

OMCs will be compensated whenever international ATF prices exceed a benchmark determined under the scheme. The government said the corpus would offset losses incurred by OMCs from elevated fuel prices while allowing airlines to operate under a fixed-price arrangement. 

The support will remain in force for 36 months, with provision for annual review, or until the advance amount is fully recovered, whichever is earlier. The government may extend the arrangement if the corpus has not been fully settled within that period.