India pumps $1 billion to support airlines amid a jump in fuel prices

The decision came in light of the increasing repercussions of the almost complete cessation of shipping traffic through the Strait of Hormuz, one of the most important strategic passages for global oil trade, through which about 20% of oil supplies pass under normal conditions, which led to a significant rise in the prices of fuel used in the aviation sector.

Supporting the stability of fuel prices

According to the Indian government, the amount will be disbursed in the form of a one-time, interest-free advance to state-owned oil marketing companies, with the aim of supporting the stability of fuel prices. Aviation turbine fuel prices and reducing operational burdens on local and international airlines.

The government confirmed in a statement that this step aims to maintain the continuity of air transport services and ensure the stability of air connectivity inside and outside India, at a time when airlines face increasing challenges as a result of high operating costs.

Official data indicates that aviation fuel prices in India have jumped by more than 130% since last March, rising from 60.50 rupees per liter to 142 rupees per liter during May, which put great pressure on airline companies.

Indian Oil Minister Hardeep Puri confirmed that the financing package will contribute to protecting about 7.7 million jobs directly and indirectly linked to the aviation sector.

Oil and fuel price fluctuations

He explained that government support will also enhance the sustainability of huge public investments in airport infrastructure, by ensuring the continuation of airline operations and their ability to face sharp fluctuations in energy markets.

This step comes within a series of measures taken by the Indian government to deal with the economic repercussions of global geopolitical crises, and to protect vital sectors from the effects of oil and fuel price fluctuations.

Observers believe that the new package reflects New Delhi’s keenness to support the aviation sector as it is one of the main engines of economic growth, trade and tourism, especially in light of the challenges imposed by recent developments in the Middle East region.