The government has announced a 25% maximum monthly increase cap on jet fuel prices for domestic flights, aiming to shield passengers from sudden airfare hikes. Defence Minister Rajnath Singh praised this move, highlighting its benefits amid the ongoing global energy crisis linked to disruptions in maritime traffic at the Strait of Hormuz.
The decision to cap jet fuel prices came after Indian retailers raised aviation turbine fuel (ATF) prices by 8.5% on April 1. ATF prices are typically adjusted based on international benchmarks due to its deregulated nature. Despite a significant rise in global crude oil prices, the government is only passing on a partial and staggered 25% increase to airlines.
In response to the fuel price surge, major Indian airline IndiGo adjusted its fuel surcharge, ranging from Rs 275 to Rs 10,000. IndiGo explained that while fully offsetting the fuel cost increase would require substantial fare adjustments, they have chosen to minimize the impact on customers. The airline had already implemented fuel charges ranging from Rs 425 to Rs 2,300 on flights since mid-March due to the escalating fuel prices linked to the ongoing geopolitical tensions.