The Centre is likely to put its Rs 10,000-crore Aviation Turbine Fuel (ATF) Price Stabilisation Scheme in abeyance after it failed to attract a single airline, according to people familiar with the matter.
The scheme, approved on June 3, 2026, was conceived as an emergency cushion to protect airlines from a sharp rise in aviation fuel prices amid geopolitical tensions in West Asia. However, softer market-linked oil prices since then have reduced the urgency for carriers to opt into the programme, the sources said.
"No airline has signed a memorandum of understanding under the scheme," sources said.
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The scheme had proposed capping the benchmark domestic ATF price in Delhi at Rs 115 per litre for participating airlines for up to three years. The government had earmarked Rs 10,000 crore for the initiative to shield the aviation sector from prolonged fuel price volatility.
Officials said the scheme has failed to gain traction as crude oil prices retreated from the highs seen during the West Asia conflict, reducing the immediate need for government intervention.
"The scheme may now be kept in abeyance. However, it can be revived if global oil prices remain elevated or fresh geopolitical disruptions lead to sustained fuel price spikes," another person familiar with the discussions said.
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The development underscores how rapidly changing energy markets have altered the government's assessment of the need for extraordinary support measures. While the stabilisation fund was designed as a contingency mechanism during a period of heightened uncertainty, easing fuel prices have diminished its relevance for now.
Queries sent by NDTV Profit to the Ministry of Petroleum and Natural Gas and the Ministry of Civil Aviation remained unanswered at the time of publication.
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