Global jet fuel costs have skyrocketed by 86% as of the week ending March 13; however, oil marketing companies (OMCs) have not completely transferred this increase during the March pricing cycle. Consequently, domestic aviation turbine fuel (ATF) prices have only seen a slight rise from $778.85 per kilolitre in February to $816.9 per kilolitre in March.
“There will definitely be an impact on ATF prices,” stated Aviation Minister Ram Mohan Naidu, indicating that the effects are likely to become apparent from April 1.
The government is currently gathering feedback from airlines regarding the economic impact and will evaluate measures that can be taken “in the interest of passengers.”
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Similarly, the Air India CEO expressed concerns, noting that while spot prices for jet fuel have more than doubled, the majority of the impact will be felt next month.
He mentioned that although airlines have implemented fuel surcharges, there is a limit to how much fares can increase before demand starts to decline.
The CEO also highlighted that some global airlines have already reduced flights due to high fuel costs, adding that Air India might need to modify its schedule depending on the trends in fuel pricing, airfare, and passenger demand.
On Saturday (March 21), the Ministry of Civil Aviation rescinded the temporary cap on domestic airfares, effective from March 23, marking a shift back to market-driven pricing after a period of regulatory intervention.
The fare caps were originally imposed in early December 2025 during the peak of the IndiGo disruption, when widespread flight cancellations led to an extraordinary surge in ticket prices across various routes.
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