Explained: How the ₹10,000 crore ATF Price Stabilisation Fund will work

The Union Cabinet’s approval of a ₹10,000 crore Aviation Turbine Fuel (ATF) Price Stabilisation Fund has sparked questions over its scope and operational mechanics.

Clarifying the move, Union Minister Ashwini Vaishnaw said the fund will not cover past losses of oil marketing companies (OMCs).

Instead, it is designed to address future price volatility, with any historical under-recoveries explicitly kept outside the scheme’s ambit.

Also read: IndiGo rebounds from day's lows after Cabinet clears ₹10,000 crore ATF stabilisation fund

Vaishnaw added that a dedicated monitoring committee will oversee the fund’s operations, while separate agreements between airlines and OMCs will govern its implementation.

He clarified that international carriers will be excluded from the scheme, which will be funded under the government’s broader Economic Stabilisation Fund framework.

The Cabinet approved the ₹10,000 crore fund after international ATF prices rose sharply from ₹60.5 per litre in March 2026 to ₹142 per litre in May 2026. The government has also capped ATF prices for domestic operations at ₹75.6 per litre.

The ATF Price Stabilisation Fund was among several decisions cleared by the Union Cabinet and the Cabinet Committee on Economic Affairs (CCEA), which approved projects and schemes worth nearly ₹39,300 crore across sectors, including aviation, highways and urban transport.