China launches avi­a­tion fuel in­dex amid slow de­mand

Business Standard - - WORLD - CHEN AIZHU

China Na­tional Avi­a­tion Fuel Group on Satur­day launched the coun­try's first avi­a­tion fuel con­sump­tion in­dex aimed at pro­vid­ing a fresh gauge for the re­gional and na­tional eco­nomic health of the world's sec­ond-largest econ­omy.

Af­ter stel­lar growth for decades, China, the world's sec­ond largest con­sumer af­ter the United States, is see­ing its avi­a­tion fuel de­mand growth slip­ping in the last few years as the econ­omy ex­pands less rapidly and more peo­ple travel by high speed rail.

"The avi­a­tion fuel in­dex will be­come a good re­flec­tion of the con­sump­tion trend and a pre­cur­sor of ma­jor events like an eco­nomic cri­sis," CNAF, the coun­try's near monopoly dis­trib­u­tor of jet fuel, said in a re­lease.

China is es­ti­mated to con­sume a to­tal of 35 mil­lion tonnes of jet fuel this year, Gong Feng, vice pres­i­dent of CNAF, told a sem­i­nar.

That's about 7 per­cent higher than last year, but down from 9 per­cent growth the pre­vi­ous year, said a sec­ond com­pany ex­ec­u­tive who de­clined to be named as not au­tho­rised to speak to me­dia.

Wu Xiao­hua, deputy di­rec­tor at the Chi­nese Academy of Macroe­co­nomic Re­search, told the same sem­i­nar that China's jet fuel ex­panded 5.8 per­cent in Septem­ber from a year ear­lier, record­ing a year-on-year de­cline in growth for seven months in a row.

At 5.8 per­cent, it rep­re­sents the slow­est growth since Jan­uary 2015, Wu said.

Pas­sen­ger travel makes up 97 per­cent of China's to­tal jet fuel con­sump­tion, which makes up some 13 per­cent of the global mar­ket, CNAF ex­ec­u­tives said.

The new in­dex, based on data CNAF ac­cu­mu­lated over the years, cov­ers 30 Chi­nese provinces and re­gions and more than 200 civil air­ports. It will be reg­u­larly pub­lished via the CNAF's web­site.

Over the next decade, China's avi­a­tion fuel de­mand is fore­cast to ex­pand 5-7 per­cent per an­num with con­sump­tion reach­ing 57 mil­lion to 68.8 mil­lion tonnes by 2028, CNAF's vice pres­i­dent Gong said.

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