The Union Cabinet on Wednesday approved a Rs 10,000 crore fuel price stabilisation scheme for airlines, extending financial support to state-owned oil marketing companies to moderate aviation turbine fuel (ATF) prices and cushion carriers from cost pressures arising from the ongoing West Asia crisis.A one-time, interest-free advance of up to Rs 10,000 crore will be provided to oil marketing companies (OMCs), enabling them to supply jet fuel to scheduled Indian airlines at a fixed price for both domestic and international operations.Briefing mediapersons on the decision, Information and Broadcasting Minister Ashwini Vaishnaw said the government has capped the ATF price for domestic airlines at Rs 75.6 per litre, significantly below the current market price.While the cap is expected to provide immediate relief to airlines, it could increase financial pressure on refiners and fuel retailers, which will be compensated through the stabilisation fund.The support mechanism comes as international jet fuel prices have surged amid geopolitical tensions in West Asia.Vaishnaw said international ATF prices have risen nearly 2.5 times, from Rs 60.5 per litre in March to about Rs 142 per litre in May.Fuel accounts for roughly 40 per cent of airline operating costs and can rise to as much as 60 per cent during periods of extreme price volatility, making it one of the industry’s largest cost components.Under the approved framework, OMCs will be compensated whenever international import parity prices exceed a benchmark level determined by the government. Once global fuel prices moderate, the support provided to OMCs will be recovered and returned to the Consolidated Fund of India through a defined true-up mechanism.The arrangement will remain in force for up to three years, subject to annual review, or until the entire support amount has been recovered, whichever occurs earlier.Participating airlines will be required to purchase ATF exclusively from OMCs under agreements signed with the fuel retailers and overseen by the ministries of civil aviation and petroleum.Vaishnaw said the scheme would help stabilise airline operating costs, reduce fare volatility for passengers and preserve domestic and international air connectivity.Officials also said the measure would support regional air services, including routes connecting smaller cities under India’s regional connectivity programme.The move comes as Indian airlines face mounting operational costs from both elevated fuel prices and longer international flight routes, following the closure of Pakistani airspace to Indian carriers.