Aviation Fuel Prices to Rise      

According to China National Aviation Fuel Group Corporation (CNAFG), the surging price of oil in the international market and the irrational prices of aviation fuel in the domestic market have led to a loss in the company. CNAFG has recently submitted a report on the loss to the National Development and Reform Commission (NDRC). The company expects that the government will raise ex-factory prices of aviation fuel in May at the earliest.
   "As aviation fuel produced in domestic refineries can not meet the demand, the company has to purchase aviation fuel from the international market," said a business manager of CNAFG. "The importing cost is around RMB9 000 per ton. The company's guiding price of aviation fuel to users in the domestic market is RMB5 950 per ton. The price difference between the two is as much as over RMB3 000 per ton."
   The fuel consumption peak in the aviation sector in 2008 came earlier than previous years. The increased fuel supply made the capital shortage. "We have recently purchased 60 000 tons of aviation fuel from the international market," said an executive of the company. "Base on the current price of aviation fuel, there is a loss of RMB200 million in this purchase alone."
   NDRC will likely increase the prices of aviation fuel by around RMB1 000 per ton in May. The cost of aviation fuel is the biggest cost in airlines of China.