The government has taken an important decision with the aim of making air travel more affordable, safe and environment friendly. The rules governing fuel used in aircraft—particularly Aviation Turbine Fuel (ATF)—have now been amended. It is expected that this change will have a direct impact on the air travel experience, the airline’s operating expenses and the environment in the future.
The Ministry of Petroleum and Natural Gas has now approved the addition of synthetic fuel to the mix by amending the rules related to ATF. This means that ethanol—which is generally considered cleaner and more sustainable—will now be allowed to be added to fuel blends alongside conventional fuels. This initiative is being hailed as the beginning of a major change in the aviation sector, which has the potential to make a significant contribution to reducing pollution in the future.
In a notification issued on April 17, the government directed these changes in the ATF rules. As a result, fuel blends prepared using synthetic hydrocarbons are now officially included in the definition of aviation turbine fuel. This amendment has been implemented in full compliance with Indian Standards IS 1571 and IS 17081. Simply put, ATF will no longer be limited to traditional fossil fuels; In fact, modern blended fuels can now also be used for aviation purposes.
Rules come into force with immediate effect
This amendment has been implemented under the provisions of the Essential Commodities Act and has come into force with immediate effect. This means that airlines and fuel suppliers can now operate in full compliance with the new regulatory framework. It is expected that this step will encourage the adoption of Sustainable Aviation Fuel (SAF) and accelerate India’s progress in this important sector. Along with this amendment, the Government has removed some of the old provisions and references contained in the previous rules. Additionally, rules related to inspection and seizure procedures have been updated to be in line with the *Indian Civil Defense Code, 2023*. The aim of these amendments is to make the regulatory framework clearer and modernised, thereby preventing any potential legal ambiguity in the future.
Discussion on reducing VAT: Tickets expected to become cheaper
Although there have been changes in the rules related to aviation fuel, the government is still worried about its rising prices. According to media reports, the Ministry of Civil Aviation is currently in talks with various state governments to reduce the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF). Major states like Delhi, Tamil Nadu, West Bengal and Maharashtra are involved in these discussions. If VAT is reduced, it may provide relief to airlines and may also reduce ticket prices for passengers.
In recent times, rising tensions in West Asia have disrupted global supply chains. This has had a direct impact on the prices of aviation fuel. The price of ATF for international flights has increased to more than ₹2.07 lakh per kilolitre. At the same time, prices are continuously increasing in the domestic market also. As a result, airlines have seen a rapid increase in operating costs.
According to rating agency ICRA, ATF alone accounts for 30 to 40 percent of the total operating expenses of any airline. In other words, airline companies spend a huge amount of money on fuel. Under these circumstances, it is becoming more difficult for airlines to manage their expenses due to rising fuel prices. This is why airlines are often forced to increase ticket prices.
In view of the current situation, the government has directed oil marketing companies to implement the increase in fuel prices for domestic airlines in a phased manner. The objective of this directive is to prevent sudden and excessive financial burden on airlines, so that they can continue their services without any major disruption.
Potential impact on future
Overall, the recent changes in ATF rules may prove beneficial for the aviation sector in the long run. These measures are expected to promote the use of cleaner fuels, provide new options to airlines, help make ticket prices more affordable, and reduce the environmental impact of aviation operations. However, high fuel prices still remain a major challenge—a challenge for which the Central Government and State Governments are working together to find practical solutions.
