New Delhi, June 4 -- A day after the Union cabinet approved a Rs.10,000 crore jet fuel price stabilization fund, the government said participation under the scheme will be optional for domestic airlines, even as it set benchmark rates that would fix domestic aviation turbine fuel (ATF) at Rs.86.32 a litre, excluding taxes.

Under the mechanism, the benchmark price for international operations has been set at Rs.104.49 a litre, excluding taxes and certain levies. Officials said the framework effectively establishes a fixed-price system based on a refined import-parity formula.

Once airlines sign a memorandum of understanding (MoU) with oil marketing companies, they will be required to pay the fixed rates even if global prices decline, and...