China cuts jet fuel price

China, the world's second-largest oil consumer, is lowering state-controlled prices of jet fuel four per cent as crude oil costs decline, reports Xinhua.
The refinery price to wholesalers for jet fuel has dropped by CNY200 (US$29) to CNY4,870 per tonne, the National Development and Reform Commission (NDRC) said in a statement.

"The cut is in line with the monthly change in crude oil prices," said Li Lei, a Beijing-based analyst at China Securities Co. "The domestic fuel-pricing system has become mature and a benefit to airlines."

China adjusts fuel prices when oil costs change more than four per cent over 22 working days under a formula introduced in December. The government cut petrol and diesel prices as much as three per cent on September 30 after New York crude fell two per cent since the earlier September 1 adjustment.

Jet fuel accounts for more than 40 per cent of domestic airlines' operating costs, according to the Civil Aviation Administration Commission. Domestic airlines including China Southern Airlines, the nation's largest, consumed 12 million tonnes of jet fuel in 2008.
Chinese airlines are allowed to hedge fuel for international routes, while prices for domestic routes are fixed.
 

Source: Transportweekly