China may reduce jet fuel surcharges by year-end
China is considering dropping jet fuel surcharges by the end of this year, Liu Shaocheng, director of the Civil Aviation Administration of China (CAAC)’s research department, said Wednesday, according to today’s National Business Daily.
Liu made the remark at the third China Aviation Leasing Summit, but he did not elaborate on the timing or degree of adjustment in jet fuel prices.
The price of aviation fuel in China was lowered 6.9 percent to 7,750 yuan ($1,138) per metric ton in the fourth quarter compared with the previous quarter.
“The reduction of fuel prices is good for aviation companies,” said an analyst who asked not to be named, from Haitong Securities, adding the reduction will alleviate aviation companies’ operation fees, and the dropping surcharges will attract more tourists to choose flying by air.
Sources close to the matter predict the surcharges may drop to the November 2007 rate, when the surcharges on domestic routes stood at 60 yuan per passenger for less than 800 kilometers, and 100 yuan for routes longer than 800 kilometers. The crude oil price was about $80 a barrel at that time.
Figures show the price for crude oil produced by the Organization of the Petroleum Exporting Countries dropped to $52.24 Tuesday, the lowest level since January 2007.
Since last year, China’s domestic jet fuel price has been adjusted quarterly in response to the price fluctuations of international jet fuel.
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