ATF price cut 2026: Jet fuel down ₹5/l to ₹110

What changed on July 1

The central government has cut aviation turbine fuel (ATF) prices for domestic airlines by ₹5 per litre, effective Wednesday, July 1. After the revision, ATF is priced at around ₹110 per litre in Delhi, according to reports citing industry sources. The move follows a decline in international crude oil prices and comes after weeks of elevated fuel costs for carriers. Reports described it as the first reduction since tensions in West Asia pushed global oil prices higher and sent jet fuel rates to record levels.

The new ATF price and the earlier level

The effective ATF price is now stated at ₹110 per litre, down from ₹115 per litre. On a bulk basis, the price has been lowered to ₹1.10 lakh per kilolitre from ₹1.15 lakh per kilolitre. The price points were reported for Delhi after the latest revision came into force. While ATF prices vary by location due to local levies and charges, the Delhi benchmark is widely tracked because it is a major consumption centre.

Why the government revised the rate

The cut was linked to easing global crude oil prices and lower volatility in international markets. Industry sources cited in reports said the revision followed the broader softening in crude after a period of sharp moves. The earlier spike was attributed to regional conflict in West Asia, which lifted global oil prices and raised the input cost for aviation fuel. The July 1 reduction signals a modest relief on the fuel line item at a time when airlines had been dealing with higher operating expenses.

Export duties updated, excise unchanged

The ATF price move came alongside a separate policy update on export duties. A day before the ATF cut was reported, the Centre updated export duties on petrol, diesel, and ATF for the two-week period starting July 1. The update did not change excise duties on petrol and diesel sold in the domestic market. The government revises export duty rates every fortnight, based on the average global prices of crude oil, petrol, diesel, and ATF since the previous review.

Why ATF matters to airline costs

ATF is a large, recurring cost for airlines, so even small changes per litre can influence overall operating expenses. The July 1 cut provides some immediate relief after an extended period of higher prices linked to global crude movements. For airlines, ATF volatility can complicate pricing decisions, capacity planning, and route economics. The relief is also relevant because fuel costs tend to rise quickly during geopolitical shocks, while fare adjustments can lag due to competitive and regulatory factors.

Recent volatility and the conflict backdrop

The provided reports refer to a period in which geopolitical tensions pushed oil prices up and led to record levels for jet fuel. One report also cited that ATF prices rose nearly 2.5 times, from ₹60.5 per litre in March 2026 to ₹142 per litre in May 2026, attributing the rise to the Middle East conflict. Against that backdrop, the July 1 reduction of ₹5 per litre is relatively small, but it is notable as the first cut after a spike.

Stabilisation measures mentioned in other reports

Separate reports included in the provided text described a government-backed ATF price stabilisation scheme aimed at reducing volatility for carriers. Under that voluntary scheme, participating airlines would pay a fixed free-on-board (FOB) benchmark price plus airport charges, oil company margins, and applicable taxes. One set of details cited a FOB benchmark of ₹86.32 per litre for domestic operations and ₹104.49 per litre for international operations, with the effective selling price in Delhi working out to about ₹115 per litre after add-ons.

Another report said a one-time, interest-free advance of up to ₹10,000 crore (100 billion rupees) would be provided to oil marketing companies (OMCs) to support stabilisation for scheduled Indian airlines. The scheme was described as lasting up to 36 months, subject to review, or until the amount advanced is recovered. These stabilisation details sit alongside the regular price revisions, and the July 1 cut reflects the latest movement in the prevailing airport price.

Key numbers at a glance

Market impact and what to watch next

The immediate impact is a reduction in the input cost of flying for domestic carriers, which had faced weeks of elevated fuel expenses. The move also indicates that ATF pricing is responding to the cooling in global crude, at least at the margin. Investors typically track ATF trends because they can influence airline margins and near-term profitability, especially when demand and pricing power are stable.

Going ahead, the key variables remain global crude prices and the government’s fortnightly export-duty assessments. Any further change in West Asia-related risk premia or crude supply expectations can feed into ATF benchmarks and revisions. For airlines, the next scheduled review periods and any updates linked to the stabilisation framework will be important to monitor.