China moves to consolidate energy giants Sinopec and CNAF
Beijing approves asset reorganisation between Sinopec and China National Aviation Fuel Group as part of broader efforts to streamline state-owned energy assets.
China approved an asset reorganisation involving its largest oil refiner, Sinopec, and China National Aviation Fuel Group (CNAF), signaling another step in the consolidation of major state-owned enterprises in the energy sector.
The State Council cleared the move, according to a statement from the State-owned Assets Supervision and Administration Commission (SASAC). While officials did not disclose details of the restructuring, similar arrangements in mainland China have resulted in mergers between state-owned groups.
Sinopec, formally known as China Petroleum and Chemical Corp, processes crude oil into a range of refined products, including jet fuel. CNAF operates the refueling network at China’s mainland airports and relies on supplies from refiners such as Sinopec, linking the two firms closely within the aviation fuel value chain.
The announcement follows earlier reports that Sinopec was in discussions to take over the jet fuel distributor as air travel rebounded after the Covid-19 pandemic. China consumes more than 40 million tonnes of jet fuel annually, equivalent to around one million barrels per day, underscoring the strategic importance of the sector.
The restructuring also comes against a backdrop of growing concern over China’s crude oil supply, particularly imports from Venezuela. China is the largest buyer of Venezuelan crude, and ongoing supply uncertainties add pressure on policymakers to strengthen domestic energy operations.
