Notice on Promoting Market-oriented Reform of Aviation Kerosene Prices

China Civil Aviation Administration, China National Petroleum Corporation, China Petroleum & Chemical Corporation, China National Offshore Oil Corporation, China Aviation Oil Group Corporation, General Logistics Department of the Chinese People's Liberation Army:

With the approval of the State Council, the relevant matters regarding the further improvement of the mechanism for determining the ex-factory price of aviation kerosene are as follows:

First, the ex-factory price of jet fuel for kerosene is gradually set by the market. In order to steadily advance market-oriented reforms, the ex-factory price of aviation kerosene (standard products) during the transitional period shall not exceed the principle of not exceeding the duty-to-state value of the imported CIF on the Singapore market, and shall be negotiated between the supplier and the buyer. The specific ex-factory price consists of the imported duty-paying price and the premium.

Second, the price of imported kerosene-in-flight duty-paid imports consists of the average offshore price of the Singapore market during the purchasing period, plus premiums, tariffs, VAT, and port charges. Among them, the price period is from the previous month on the 25th to the 24th of this month; the maritime transportation premiums are temporarily determined at 2 US dollars per barrel; the port fees are temporarily determined at 50 yuan per ton; the exchange rate is the price announced by the People's Bank of China during the purchase price period. * The average of the benchmark exchange rate; the ton-to-barrel ratio is 1:7.9.

3. The discounted water shall be negotiated and determined by the supply and demand sides in consideration of market supply and demand, freight, the number of transactions, and the trend of oil prices in the international market. China National Petroleum Corporation, Sinopec Corp. and China National Offshore Oil Corporation (CNOOC) negotiated aviation aviation kerosene for China Aviation Oil Corporation once a year. Before the end of the year, the negotiation results will be submitted to the National Development and Reform Commission (Price Division) and the Civil Aviation Administration for record. If there are major differences, coordination will be conducted by the National Development and Reform Commission (Price Division).

4. The ex-factory price of aviation kerosene is adjusted once a month, and the price adjustment time is on the 1st of every month. In the initial period, the price paid for the import of aviation kerosene on the Singapore market was temporarily announced by the National Development and Reform Commission.

V. China National Petroleum Corporation, Sinopec Corp. and China National Offshore Oil Corporation (CNOOC) for aviation kerosene prices of the General Logistics Department of the Chinese People's Liberation Army will be temporarily executed at the Singapore Airport's imported CND import and export duty.

6. The National Development and Reform Commission formulates the quality ratio of aviation kerosene standard products and non-standard products. The non-standard product ex-factory prices shall be determined by the manufacturer according to the ex-factory price and quality ratio of the standard products.

7. The new mechanism will be implemented as of August 1, 2011. August-December 2011 China National Petroleum Corporation, Sinopec Corp. and China National Offshore Oil Corporation (CNOOC) reported that the discount for AVG aviation kerosene was reported to the National Development and Reform Commission (Price Division) and the CAAC before the end of July for the record.