OMCs losing ₹30/litre on domestic jet fuel as ATF prices remain unchanged: Official

State-owned oil marketing companies (OMCs) are continuing to incur under-recoveries of around ₹30 per litre on aviation turbine fuel (ATF) sold to domestic airlines after keeping jet fuel prices unchanged for a second consecutive month, a senior petroleum ministry official said on Monday.

"There is under-recovery of around ₹30 per litre on domestic jet fuel, but this under-recovery is variable based on international prices," Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, told reporters.

The remarks came a day after OMCs announced the monthly revision in ATF prices effective June 1, under which rates for international airlines were sharply reduced while domestic carriers saw no change.

ATF supplied to international airlines was cut by about 27%, bringing prices down by over USD 400 per kilolitre to around USD 1,100 per kl.

The reduction follows a period of steep increases in international jet fuel prices.

ATF rates for overseas carriers had risen by USD 76.55, or 5.33%, to USD 1,511.86 per kl on May 1 after more than doubling in April to USD 1,435.31 per kl amid a surge in global energy prices.

Domestic airlines, meanwhile, will continue to pay ₹1,04,927.18 per kilolitre for jet fuel, a rate that has remained unchanged since April 1.

Fuel supplied for international operations is typically linked to global jet fuel benchmarks and exchange rate movements.

Domestic ATF prices, however, can be shielded from market volatility through government intervention and cost absorption by state-run fuel retailers.

The pricing decision comes at a time when Indian airlines continue to face elevated operating costs.

Tata Group-owned Air India has announced suspension and reduction of services on several international routes through August 2026, citing continued airspace restrictions and record-high jet fuel prices.

The airline has temporarily suspended flights on routes such as Delhi-Chicago and Delhi-Shanghai and reduced frequencies on services to destinations including San Francisco, Toronto, Vancouver, Paris, Melbourne, Sydney, Singapore and Bangkok.

Several regional and short-haul international routes, including Chennai-Singapore, Mumbai-Dhaka and Delhi-Malé, have also been temporarily suspended.

Air India has also cut around 22% of its domestic flights during the June-August period.

"In continuation of our previously announced adjustments to select international services between June and August 2026, we have temporarily rationalised operations on certain domestic routes during the same period, with a reduction in frequencies on select routes," the airline had said in a statement.

India's largest carrier IndiGo is also understood to be scaling back some services after the peak summer travel season amid expectations of softer demand, The New Indian Express reported, citing people familiar with the matter.