Context:
The Union Cabinet has approved a one-time ₹10,000 crore budgetary support to oil-marketing companies to stabilise Aviation Turbine Fuel prices. The move aims to protect airlines and passengers from fuel price shocks caused by rising crude oil prices and West Asia tensions.
Explanation:
- Aviation Turbine Fuel (ATF) is the specialised fuel used by jet aircrafts and forms a major part of airline operating costs.
- ATF is formed during the refining of crude oil. Hence, ATF prices are linked to international crude oil prices and global supply disruptions.
- West Asia war tensions increasing crude oil & ATF prices because the region is central to global oil production and transport routes.
- Higher ATF prices raise airline costs and may lead to flight cancellations, reduced routes and higher airfares.
- The fund will provide interest-free advances to oil-marketing companies such as IOC, BPCL and HPCL.
- Airlines will procure ATF from participating OMCs until the support amount is recovered.
- Once ATF prices moderate, the differential amount will be recovered and returned to the government.
- The fund is designed as a self-sustaining revolving mechanism.
La Excellence IAS Academy, the best IAS coaching in Hyderabad, known for delivering quality content and conceptual clarity for UPSC 2026 preparation.
FOLLOW US ON:
â—‰ YouTube : https://www.youtube.com/@CivilsPrepTeam
â—‰ Facebook: https://www.facebook.com/LaExcellenceIAS
â—‰ Instagram: https://www.instagram.com/laexcellenceiasacademy/
GET IN TOUCH:
Contact us at info@laex.in, https://laex.in/contact-us/
or Call us @ +91 9052 29 2929, +91 9052 99 2929, +91 9154 24 2140
OUR BRANCHES:
Head Office: H No: 1-10-225A, Beside AEVA Fertility Center, Ashok Nagar Extension, VV Giri Nagar, Ashok Nagar, Hyderabad, 500020
Madhapur: Flat no: 301, survey no 58-60, Guttala begumpet Madhapur metro pillar: 1524, Rangareddy Hyderabad, Telangana 500081
Bangalore: Plot No: 99, 2nd floor, 80 Feet Road, Beside Poorvika Mobiles, Chandra Layout, Attiguppe, Near Vijaya Nagara, Bengaluru, 560040
ATF Price Stabilisation Fund