Fuel crisis drives up airfares, with airlines warning of further increases ahead.
Dubai: Airfares for Indian expatriates in the UAE and wider Gulf are set to rise as fuel costs surge, with airlines warning of knock-on disruptions in the coming weeks.
Travellers may also face reduced flight frequencies if Indian carriers cut capacity, along with less flexibility when booking during peak periods.
India has kept jet fuel prices steady for domestic flights while sharply increasing rates for international operations, offering limited relief to airlines already warning of a potential shutdown.
State-run Indian Oil Corporation, which sets benchmark fuel prices, said it would keep domestic aviation turbine fuel (ATF) unchanged at about INR 104,927 (Dh4,060) per kilolitre.
However, prices for international routes have been raised to roughly INR 142,425.40 (Dh5,530) per kilolitre, reflecting rising global costs, according to Bloomberg.
The move comes as airlines worldwide grapple with a jet fuel crunch linked to the Middle East conflict and supply disruptions through the Strait of Hormuz. Oil prices have surged, with Brent crude rising to about $111 a barrel on Friday — up sharply from around $65 before the conflict escalated — amid stalled efforts to resolve the war.
Airlines warn of shutdown risk
Indian carriers say the situation has reached a breaking point.
“The airline industry in India is under extreme stress and on the verge of closing down or stopping operations,” the Federation of Indian Airlines said in a letter to the government.
The body, which represents major carriers including Air India, IndiGo and SpiceJet, warned that any further increase in fuel prices could force aircraft to be grounded and flights to be cancelled.
Fuel accounts for up to 40% of an airline’s operating costs, leaving the sector highly exposed to price shocks.
Relief at home, pressure abroad
By keeping domestic fuel prices steady, the Government of India has provided some relief for local routes, where demand tends to be more price sensitive.
However, higher fuel costs for international operations are expected to add further pressure on long-haul routes — a key segment for Indian expatriates travelling to and from the Gulf.
Airlines operating overseas are already dealing with rising expenses due to a weaker Indian rupee, which increases dollar-denominated costs such as aircraft leases and airport charges.
Why fuel is so expensive in India
Despite producing sufficient jet fuel domestically, India prices aviation turbine fuel (ATF) at import parity — effectively treating it as though it were imported from the Gulf.
This means airlines end up paying notional freight, insurance and customs duties, making fuel significantly more expensive than at hubs such as Dubai, Singapore and Kuala Lumpur.
However, authorities have taken some steps to ease the burden. India has capped monthly fuel price increases at 25% and temporarily reduced airport charges. It has also cut export taxes on jet fuel for early May to improve supply availability.
But airlines are pushing for more support, including a return to pandemic-era cost caps and broader tax relief.
