Page 69 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

(vi) Monitoring and Audit

A Monitoring Committee comprising representatives of the Ministry of Civil Aviation, Ministry of
Petroleum & Natural Gas and Department of Expenditure shall oversee implementation, claim
verification, reconciliation and settlement. All claims and recoveries shall be subject to audit.

(vii) Duration of Price Stabilization support

ATF price stabilization support will be in force for a period of thirty-six months with provision for annual
review or until the advance amount is fully recovered/settled, whichever is earlier. The proposal may be
extended beyond thirty-six months with the approval of the Competent Authority in case the corpus is
not fully trued up within this period.

Expected outcome:

• The proposed mechanism will provide enhanced stability and predictability in ATF pricing for
Indian airlines, enabling better operational and financial planning.

• It will shield Oil Marketing Companies (OMCs) from losses arising from volatile and elevated ATF
prices during the ongoing West Asia crisis.

• The measure will help protect and sustain domestic and international air connectivity, ensuring
continuity of air services.

• It will reduce the pass-through of fuel price shocks to passengers, thereby helping to moderate
fare volatility.

• The arrangement will support continued air connectivity to remote, regional, Tier-II and Tier-III
cities, promoting balanced regional development and inclusive growth.

Key Benefits:

• Stable airline operations help sustain employment across airlines, airports, ground handling
agencies, MROs, travel agencies, hospitality and logistics sectors.

• Continued air connectivity will facilitate movement of passengers, high-value cargo, business
travelers and tourists, thereby supporting economic activity across sectors.

• The measure will have positive spill-over effects on tourism, hospitality, trade, exports, regional
development and investment.

• It will help ensure optimum utilization of airport infrastructure developed across the country,
including airports operationalized under the UDAN scheme.

• By preserving domestic and international connectivity, the initiative will strengthen India's
integration with global markets and support long-term economic growth.

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