Beijing cuts domestic fuel prices by 1.6%

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Published: May 3, 2012

The Chinese government has cut domestic jet fuel prices to CNY7,932 ($ 1,257) per ton, down 1.6% from CNY8,061 per ton international fuel prices keep fluctuating.

This is the second time the Chinese government has reduced domestic jet fuel prices this year. Beijing cut domestic fuel prices 3.8% to CNY7,360 per ton in January from CNY7,653 per ton in December. The Chinese government has raised fuel prices three times this year (ATW Daily News, April 6).

Fuel costs comprise more than 40% of China’s big three carriers total operating expenses, so it is expected the reduction will give some relief to Chinese carriers.

 China Southern Airlines (CZ), which operates 80% of its flights on domestic routes, could see its fuel costs decrease by CNY335.4 million annually. Air China (CA) and China Eastern Airlines (MU), which operate 70% of their flights on domestic routes, could see their annual fuel costs reduce by CNY287.26 million and CNY297.2 million, respectively.

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