Global jet fuel prices have surged 86% till the week ending March 13, but oil marketing companies (OMCs) have not fully passed on the increase in the March pricing cycle. As a result, domestic aviation turbine fuel (ATF) prices have risen only marginally from $778.85 per kilolitre in February to $816.9 per kilolitre in March.
“There will definitely be an impact on ATF prices,” the Aviation Minister Ram Mohan Naidu said, adding that the effect is likely to be visible from April 1.
The government is currently taking feedback from airlines on the economic impact and will assess what can be done “in the interest of passengers.”
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Echoing similar concerns, the Air India CEO said that although spot prices for jet fuel have more than doubled, most of the impact will be felt next month.
He noted that while airlines have imposed fuel surcharges, there is a limit to fare hikes before demand begins to weaken.
The CEO also pointed out that some global carriers have already cut flights due to elevated fuel costs, and added that Air India may have to adjust its schedule depending on how fuel costs, airfares and passenger demand evolve.
The Ministry of Civil Aviation on Saturday (March 21) also withdrew the temporary cap on domestic airfares, with the order coming into effect from March 23, signalling a return to market-driven pricing after months of regulatory intervention.
The fare caps, imposed in early December 2025, were introduced at the height of the IndiGo disruption, when widespread flight cancellations triggered an unprecedented surge in ticket prices across routes.
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