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China will raise the fuel surcharge for domestic air routes by RMB 10 ($1.59) per person effective Tuesday after international crude oil prices surged in February, major airlines announced on Sunday.
Fuel surcharges for domestic routes of up to 800 kilometers and above 800 kilometers will be increased to RMB 80 ($12.7) and to RMB 140($22.3), respectively, said airlines including Shanghai and Hong Kong Stock Exchange Air China Ltd., the national carrier.
Carriers are permitted to raise domestic surcharges if fuel prices increase by RMB 250 ($40) per ton or more, according to the pricing policy of the National Development and Reform Commission, the nation's top state economic planner.
The price of China's ex-refinery jet fuel for March averaged RMB 7,885 ($1,255) per ton, representing an increase of RMB 359 ($57.2) per ton from February, Li Hong, an independent oil analyst, told Interfax.
The ex-refinery price is based on the post-tax CIF price and includes the discounts for the jet fuel supplied by PetroChina Ltd., Sinopec Corp. and CNOOC Ltd. to China National Aviation Fuel Group Corp., the country's near-monopoly marketer of aviation fuel.
China calculates the monthly post-tax CIF price by adding the FOB price of Singapore jet fuel to transportation costs, customs duties, value-added tax and port charges.
Despite the increase in surcharges domestic carrier are still expected to have a poor financial performance in the first quarter due to high fuel costs,noted Li.
China raised the retail price of gasoline by RMB 300 ($47.7) per ton and diesel by RMB 290 ($44.5) per ton on Feb. 25 following a jump in global crude oil prices in February.