![\"ATF](\"https:\/\/static.toiimg.com\/thumb\/msid-131614146,imgsize-323559,width-400,height-225,resizemode-4\/article-35.jpg\" "\\"Representative")
<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div><\/div>\n<\/div>\nAviation turbine fuel (ATF) prices for domestic airlines rose by around 10 per cent on Tuesday as state-owned oil marketing companies rolled out a government-backed price stabilisation scheme that will allow carriers to lock in fuel rates for up to three years.Under the new regime, airlines opting into the scheme will pay a fixed ATF price of about Rs 115 per litre, compared with the previous rate of Rs 104.93 per litre. The move is aimed at shielding carriers from sharp swings in global oil prices and reducing the impact of fuel volatility on airfares.The scheme, which is voluntary, allows airlines to choose between a fixed fuel price and market-based pricing. Carriers that join the programme will be insulated from fluctuations in global crude and jet fuel prices, while those that stay out will continue to pay prevailing market rates and remain exposed to both price increases and declines.According to industry sources, cited by news agency PTI, participating airlines will pay a fixed free-on-board (FOB) benchmark price of Rs 86.32 per litre, along with airport charges, oil company margins and taxes. This translates to an effective selling price of about Rs 115 per litre in Delhi, Rs 114.5 per litre in Mumbai and Rs 139 per litre in Chennai.The move comes after domestic ATF prices remained largely unchanged for more than two months despite a rise in international fuel costs following the outbreak of conflict in West Asia earlier this year. The limited pass-through of higher global prices had resulted in losses for state-owned oil marketing companies.To address these losses and shield airlines from volatility, the Union Cabinet approved a Rs 10,000-crore price stabilisation mechanism. Under the framework, if global benchmark prices rise above the base rate of Rs 86.32 per litre, the government will provide interest-free advances to oil companies to bridge the gap. When prices fall below the benchmark, the excess amount will be recovered and returned to the Consolidated Fund of India.Officials said the arrangement is designed as a stabilisation mechanism rather than a subsidy, with provisions for monitoring, accountability and eventual recovery of government support.ATF is one of the largest cost components for airlines, accounting for roughly 40 per cent of operating expenses and rising to as much as 60 per cent during periods of elevated fuel prices.PTI’s industry sources said international jet fuel prices had climbed to nearly Rs 142 per litre in May, compared with about Rs 60.5 per litre before the West Asia conflict, fuelling concerns over airline profitability and the possibility of higher airfares.<\/div>\n