Aviation turbine fuel (ATF) prices for domestic airlines rose nearly 10 per cent on Tuesday as state-owned oil marketing companies launched a government-backed price stabilization scheme that will allow carriers to lock fuel rates for three years.Under the new arrangement, airlines joining the scheme will have to pay a fixed ATF price of around Rs 115 per litre, while the previous rate was Rs 104.93 per litre. The move is aimed at protecting carriers from sharp fluctuations in global oil prices and reducing the impact of fuel volatility on airfares.The scheme, which is voluntary, allows airlines to choose between a fixed fuel price and market-based pricing. Carriers joining the program will be protected from fluctuations in global crude oil and jet fuel prices, while those remaining outside will continue to pay prevailing market rates and be exposed to both price increases and decreases.According to industry sources quoted by news agency PTI, participating airlines will have to pay a fixed free-on-board (FOB) benchmark price of Rs 86.32 per liter inclusive of airport charges, oil company margin and taxes. This means the effective selling price is around Rs 115 per liter in Delhi, Rs 114.5 per liter in Mumbai and Rs 139 per liter in Chennai.The move comes after domestic ATF prices remained unchanged for more than two months despite a rise in international fuel costs following the outbreak of the conflict in West Asia earlier this year. State-owned oil marketing companies suffered losses due to the limited impact of higher global prices.To address these losses and protect airlines from volatility, the Union Cabinet approved a price stabilization mechanism of Rs 10,000 crore. Under the framework, if global benchmark prices rise above the base rate of Rs 86.32 per litre, the government will provide interest-free advances to oil companies to bridge the gap. When prices fall below the benchmark, the excess amount will be recovered and returned to the Consolidated Fund of India.Officials said the arrangement is designed as a stabilization mechanism rather than a subsidy, with provisions for monitoring, accountability and eventual recovery of government support.ATF is one of the largest cost components for airlines, accounting for approximately 40 percent of operating expenses and rising to 60 percent during high fuel prices.International jet fuel prices touched around Rs 142 per liter in May, compared to around Rs 60.5 per liter before the West Asia conflict, raising concerns over airline profitability and the possibility of higher airfares, PTI’s industry sources said.