Oil prices fall to $70: Will your next flight cost less? Here’s what the government said | Today’s news
With global oil prices falling to pre-conflict levels, the Center has hinted at the possibility of lower airfares in the future by asking airlines to review fuel-related surcharges if the decline in aviation turbine fuel (ATF) prices is sustained.
Talking to reporters on Thursday, Union Civil Aviation Minister K Ram Mohan Naidu said the government is closely monitoring ATF prices and is in talks with airlines to assess whether the recent decline in fuel prices is a permanent trend or just a temporary correction.
Airfare has surged in recent months after global oil benchmarks breached $100 a barrel, raising ATF prices and prompting airlines to introduce additional fare components and increase fees.
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Now that oil prices are hovering around $70 a barrel, questions have been raised about whether travelers can expect cheaper airfares in the coming months.
What did the Union Minister say?
Responding to these concerns, the minister said the government would first assess whether the reduction in fuel prices is consistent before starting discussions on reducing additional air fare charges.
“Secondly, now that we’re seeing prices come down, we still have to see if it’s a long-term reduction or if it’s sudden, and we’re discussing that with the airlines,” the minister said.
Naidu noted that the last few months have been particularly significant for the Indian aviation industry, so it is important to avoid premature decisions based on short-term fluctuations in oil prices.
“The last 4 months have been very important for the airlines… Once we are clear that the price stability will continue for a long time, we will talk to them and work to reduce the surcharges or extraordinary fares that we are seeing right now,” Naidu told news agency ANI.
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Currently, jet fuel prices for turbines are revised every fortnight in line with international oil price developments. With fuel making up a substantial part of airlines’ operating costs, any sustained decline in ATF prices has the potential to reduce pressure on carriers and potentially impact ticket prices.
The minister also highlighted the Centre’s efforts to protect the aviation industry from fluctuations arising from geopolitical tensions in West Asia.
“In the case of ATF, we also provided a price stabilization fund in the amount of ₹10,000 crore.”
He added: “So you can see how important the Indian government is considering this issue right now.”
According to the government and ₹10,000 crore price stabilization fund was created to support airlines during a period of financial stress associated with the ongoing crisis in West Asia.
In addition to the stabilization fund, the center has introduced a number of measures aimed at easing the financial burden on airlines. These include capping ATF prices for domestic scheduled operators, reducing airport charges and extending assistance under the Emergency Credit Linkage Scheme.
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While government statements raised hopes of lower airfares, no immediate reduction was announced. Officials said any move to review surge charges would depend on aviation fuel prices remaining stable over a longer period.
The Center currently continues to monitor developments in the global oil market and consult with airlines before making any decisions on fare components.
