The Modi government has assured Parliament that India’s oil refineries are operating at high capacity utilization, often exceeding 100%, to shield consumers from West Asia supply shocks.
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Indian oil refineries- File image-IANS
New Delhi: Amid escalating tensions in West Asia, the Centre on Thursday assured that India’s refineries are operating at maximum capacity with robust crude inventories and sufficient stocks of petrol, diesel, and LPG to guarantee uninterrupted supply across all sectors. Simultaneously, the Civil Aviation Ministry announced a major breakthrough: a one-time Cabinet-approved budgetary support mechanism of up to Rs 10,000 crore to provide critical aviation turbine fuel (ATF) price stabilization support for scheduled Indian airlines. Here are all the details you need to know about the statement made by the Modi government on impact of West Asia crisis on Indian oil refineries.
Impact of ongoing West Asia crisis on Indian economy
The initiative has been introduced in view of the extraordinary volatility in global fuel prices triggered by the ongoing West Asia crisis. Officials said the mechanism is designed as a temporary and self-correcting arrangement under which the government will provide an interest-free advance to oil marketing companies, enabling them to supply ATF to airlines at predetermined and stable prices for both domestic and international operations.
When international ATF prices exceed the benchmark level, the corpus will compensate oil marketing companies for the difference, while any price moderation will lead to recovery of funds and their return to the Consolidated Fund of India through a transparent true-up process. The government emphasised that the arrangement is not a subsidy but a stabilisation mechanism intended to smooth extreme price fluctuations in global fuel markets. Since ATF forms a major component of airline operating costs, the measure is expected to provide pricing predictability and help airlines manage operations more efficiently during a period of geopolitical uncertainty.
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Officials said the decision will help moderate sudden airfare spikes caused by volatility in fuel prices, thereby benefiting passengers, including families, students, business travellers and tourists. It is also expected to ensure continued air connectivity across the country, including remote, regional and smaller cities, supporting economic activity and inclusive development.
The government added that the measure will have wider economic benefits by supporting employment across aviation, tourism, logistics and allied sectors, while strengthening domestic and international connectivity. It will also help optimise the use of airport infrastructure, including facilities developed under the UDAN scheme.
(With inputs from news agency)
