ATF price hike: IndiGo recalibrates fuel surcharge for domestic flights; steep hike in levy on international flights

For international flights—where the full price increase is being passed on to airlines—the surcharges have been hiked from Rs 425-2,300 to Rs 900-10,000.

According to the Ministry of Petroleum and Natural Gas (MoPNG), given the surge in international prices of jet fuel, the price in India was expected to more than double from Wednesday (April 1), but only a “partial and staggered” increase is being passed on for now for scheduled domestic airlines.

For overseas flights, however, airlines will have to pay the full market-linked price for ATF. Non-scheduled operators, like private charter operators, will also have to pay the full price, which has gone up by almost 115% from March levels.

Following the announcement from the MoPNG, ATF prices listed on the website of India’s largest OMC Indian Oil Corporation (IOC) were revised significantly downwards from levels that were published early Wednesday morning.

The price of ATF in Delhi had jumped almost 115% month-on-month to a record Rs 2.07 lakh per kiloliter as of early Wednesday; the price listed now specifically for scheduled domestic airlines is Rs 1.05 lakh, higher by just 8.6% from March levels. The new reduced price for domestic scheduled airlines in Mumbai is Rs 98,247 per kilolitre, against the full price of Rs 1.95 lakh.

For airlines on international run, the price of ATF in Delhi jumped 107% to $1,690.81 per kilolitre. The OMCs usually revise jet fuel prices on the first of every month; ATF prices vary across the country due to differences in levies charged by states.

“IndiGo is thankful to the Government for timely intervention, without which April 2026 fuel cost increases would have severely impacted affordability of domestic air travel.

For International Operations, ATF prices have more than doubled in the last month, consequentially driving a significant impact on the airline’s operating costs on these routes… Although fully offsetting the fuel price increase would require substantial fare revisions, IndiGo has passed on a relatively smaller amount to customers keeping in mind the consequential burden on them,” the airline said in a release. The revised fuel surcharges will be effective for bookings made from Wednesday midnight.

Instead of the flat levy of Rs 425 for domestic flight tickets, which took effect from march 14, IndiGo will now have a distance-based surcharge: Rs 275 for distance up to 500 km (like Delhi-Jaipur), Rs 400 for 501-1,000 km (like Delhi-Ahmedabad), Rs 600 for 1,001-1,500 km (like Delhi-Mumbai), Rs 800 for 1,501-2,000 km (like Delhi-Bengaluru), and Rs 950 for over 2,000 km (like Delhi-Thiruvananthapuram).

As for international flight tickets, those to and from countries in the Indian subcontinent will attract a surcharge of Rs 900 for distances up to 500 km and Rs 2,500 beyond 500 km. For West Asia, flights with a distance of up to 2,000 km will have a surcharge of Rs 3,000, and Rs 5,000 for those above 2,000 km.

As for Southeast Asia and China, flights with a distance of up to 2,000 km will have a surcharge of Rs 3,500, while those with distances beyond 2,000 km will attract Rs 5,000. Flight to and from Africa will also attract a surcharge of Rs 5,000, while those to and from Greece and Turkey will have a surcharge of Rs 7,500. Rest of Europe and the UK will attract a levy of Rs 10,000.

These are significantly higher from the surcharges that were so far in place: Rs 425 for flights in the Indian subcontinent, Rs 900 for West Asia flights, Rs 1,800 for flights to and from Southeast Asia, China, and Africa, and Rs 2,300 for European flights.

The initial charge, imposed from April 14, was based on the indication that the regional jet fuel price benchmark at the time was higher by over 85% since the war began. International jet fuel prices are now 130% higher on a month-on-month basis, according to IndiGo.

Jet fuel accounted for over 40% of Indian airlines’ operating costs even before the war and industry insiders had cautioned that a significant jump in fuel prices and the consequent surge in airfares could lead to demand destruction, forcing airlines to cut flights on routes that see a fall in passenger footfalls. MoPNG, MoCA, and the OMCs were in talks on ATF pricing in view of the global price surge amid the West Asia war.

The jump in ATF prices—except for the regulated increase for domestic airlines—in India appears broadly in line with the movement in international prices.

ATF prices in India are linked to the Mean of Platts Arab Gulf (MOPAG), a price assessment by S&P Global based on jet fuel prices in West Asia. The global average jet fuel price for the week ended March 27 was $195.19 per barrel, up 103.9% from the February average and 116.8% higher than last year’s average, according to data from S&P Global Energy compiled by the International Air Transport Association (IATA).

Since the beginning of the West Asia war on February 28, global ATF prices have almost doubled to $195.19 per barrel for the week ended March 27 from $99.40 for the week ended February 28, as per the data compiled by IATA.

The crack spread—difference between the price of crude oil and products like ATF derived from it—trebled to $81.44 per barrel for the week ended March 27 from $27.83 for the week ended February 27.

Given the surge in crack spreads, which are reflective of margins, there have been calls in recent weeks from India’s aviation sector to de-link ATF pricing in India from global jet fuel prices, and instead have a pricing model based on the price of crude and an agreed margin over that, it is learnt.