Cabinet approves ₹10,000 crore Price Stabilisation Fund for ATF pricing for Scheduled Indian Airlines
On 3 June 2026, the Union Cabinet approved one-time budgetary support of up to ₹10,000 crore, as interest-free advances to Oil Marketing Companies, to stabilise ATF prices for Scheduled Indian Airlines amid fuel price volatility from the West Asia crisis.
Summary
The Union Cabinet chaired by Prime Minister Narendra Modi approved on 3 June 2026 a one-time budgetary support of up to ₹10,000 crore for Oil Marketing Companies (OMCs) to provide Aviation Turbine Fuel (ATF) price stabilisation support to Scheduled Indian Airlines for domestic and international operations. The support will be given as interest-free advances to OMCs through the Demands for Grants of the Ministry of Petroleum and Natural Gas, during the period of exceptional fuel price volatility arising from the West Asia crisis. The corpus will compensate OMCs whenever the import parity price exceeds a benchmark price; when international ATF prices moderate, the differential will be recovered from OMCs and returned to the Consolidated Fund of India. The arrangement uses a fixed ATF price and will be implemented through an MoU between participating airlines and OMCs, with the Ministries of Civil Aviation and Petroleum and Natural Gas as signatories. The Consolidated Fund of India is created under Article 266 of the Constitution.
Key facts
- Approved
- 3 June 2026, Union Cabinet
- Support
- One-time, up to ₹10,000 crore
- Form
- Interest-free advances to OMCs via Demands for Grants of MoPNG
- Beneficiaries
- Scheduled Indian Airlines, domestic and international operations
- Trigger
- Import parity price above a benchmark price; West Asia crisis volatility
- Recovery
- Differential recovered from OMCs and returned to the Consolidated Fund of India
- Implementation
- MoU between airlines and OMCs; MoCA and MoPNG signatories
- Static
- Consolidated Fund of India: Article 266
Practice MCQs 4 questions
In June 2026, the Union Cabinet approved one-time budgetary support of up to how much for ATF price stabilisation for Scheduled Indian Airlines?
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Correct answer: B — ₹10,000 crore
The Cabinet approved one-time budgetary support not exceeding ₹10,000 crore for OMCs.
Under the ATF Price Stabilisation Fund approved on 3 June 2026, the budgetary support will reach Oil Marketing Companies in which form?
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Correct answer: D — Interest-free advances
The support is given as interest-free advances to OMCs through the Demands for Grants of the Ministry of Petroleum and Natural Gas.
Consider the following statements about the ATF Price Stabilisation Fund approved in June 2026: 1. It covers both domestic and international operations of Scheduled Indian Airlines. 2. It will be implemented through an MoU between participating airlines and OMCs, with the Ministries of Civil Aviation and Petroleum and Natural Gas as signatories. Which of the statements given above is/are correct?
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Correct answer: A — Both 1 and 2
Both statements are in the Cabinet release: coverage is domestic and international, and implementation is through an airline–OMC MoU with MoCA and MoPNG as signatories.
Under the ATF price stabilisation mechanism of June 2026, amounts recovered from OMCs when ATF prices moderate go back to the Consolidated Fund of India. Which Article of the Constitution creates the Consolidated Fund of India?
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Correct answer: C — Article 266
Article 266(1) provides that all revenues, loans raised and loan repayments received by the Government of India form the Consolidated Fund of India. Article 267 deals with the Contingency Fund.