The China National Aviation Fuel Corp (CNAF), China's dominant jet supplier, lifted the benchmark price of jet it supplies to domestic airlines to Yuan 7,785/mt on Aug 1, up by Yuan 85/mt or 1.11%, according to a source with a domestic airline company.
The rise was in tandem with the increase in CNAF's purchasing price of the fuel, which gained by Yuan 85/mt to Yuan 7,725/mt, the source said.
The spread between the benchmark price and CNAF's purchasing price of jet remained unchanged at Yuan 60/mt.
CNAF will continue to adjust the benchmark price each quarter according to changes in international crude and jet prices in the previous quarter, the source also said.
The actual settlement price for jet supplied to domestic airlines is at the benchmark price plus a negotiated premium, which was be settled by CNAF and airports. The settlement price for domestic airlines in Guangzhou airport, for instance, is Yuan 8,165/mt with a negotiated premium of Yuan 380/mt. The price for Shenzhen airport is Yuan 8,125/mt with Yuan 340/mt of negotiated premium. The premiums were unchanged.
Domestic airline companies evaluated fuel surcharge of domestic long-haul flights by Yuan 10 to Yuan 150 on Aug 2, but it kept that of domestic short-haul flights unchanged at Yuan 80.
Sinopec recently required subsidiary refineries to raise ex-refinery prices of jet for supplying CNAF by Yuan 78/mt to Yuan 7,718/mt from Aug 1, C1 reported earlier.
The National Development & Reform Commission, China's energy watchdog, announced China would adjust jet ex-refinery price on the first day of each month from Aug 1. The price will be not higher than the after-tax import cost of Singapore jet.
