China raises jet fuel prices 11%
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China’s National Development and Reform Commission (NDRC) has raised domestic jet fuel prices by about 11%, the Shanghai Daily reported. Fuel prices will rise to CNY4,450 (US$652) a ton from the previous CNY3,990 a ton, according to the report.
An official with China Petroleum and Chemical Corp, also known as Sinopec, confirmed that the company has received a notice from the NDRC, about the price increase.
The move is likely to have serious implications for China’s struggling airlines. The Shanghai Daily report quotes industry analysts as estimating that the price rise will potentially cut the annual profits of Air China by CNY490 million, China Southern Airlines by CNY990 million and China Eastern Airlines by CNY500 million. The figure for estimated at CNY190 million for Shanghai Airlines, and CNY230 million, for Hainan Airlines, the report added.
Chinese carriers suffered heavy losses last year because of slumping demand and higher fuel prices, with the ‘big three’ carriers losing a total of CNY28 billion.
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