Fuel Adjustment Factor: All India Transporters’ Welfare Association i.e. AITWA, an organization of transporters across the country, has announced the implementation of Fuel Adjustment Factor i.e. FAF in the freight rates. The organization says that due to the ongoing global tension and war-like circumstances, the international energy market and supply chain has been deeply affected, due to which the cost of the transport industry has increased significantly.

Rising prices of diesel became a major reason

According to AITWA, there has been a sharp rise in diesel prices from May 15, 2026. The supply of crude oil has been disrupted due to restrictions and global tensions around the Strait of Hormuz. Apart from this, due to increasing pressure on the Indian rupee, the cost of importing crude oil has also increased significantly. There are also reports of shortage at diesel pumps at many places, due to which the movement of trucks is being directly affected.

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The organization said that in the last two months the prices of DEF i.e. AdBlue have almost doubled. Tire prices have also increased by about five percent. Along with this, toll fees have also increased across the country from April 1, 2026. AITWA says that diesel accounts for about 65 percent of the total operating cost of transport, hence it has become necessary to add these increased costs to the existing freight contracts.

What is the formula of FAF?

AITWA has fixed a simple formula under FAF. Considering the diesel price of May 15, 2026 as the base, after this, for every increase of one rupee per liter in diesel, the freight rate will be increased by 0.65 percent. The organization has made it clear that this FAF is only to compensate for the increased fuel cost and there will be no separate profit for the transporters from it.

AITWA has appealed to trade and industry organizations that this FAF, implemented from May 20, 2026, should not be seen as a normal annual increase but should be considered as an extraordinary global cost adjustment. The organization also reminded that road transport is the backbone of India’s supply chain and the support of the industry is very important in these difficult times.

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