China to up jet fuel prices 15 pct for local airlines

BEIJING (Reuters) - China's National Aviation Fuel Holding (CNAF), the country's near-monopoly jet fuel distributor, is set to charge domestic airlines about 15 percent more from July 1, an industry executive said on Monday.

The expected 900 yuan per tonne hike, pending final government approval as soon as later on Monday, follows a surprise increase in ex-refinery jet fuel prices of 1,500 yuan per tonne from June 20.

The adjustment, once in a quarter and under a mechanism in place from July 2006 that takes into account import costs, has in most of the last two years shielded Chinese airlines from soaring global oil prices.

But the increase this time, the biggest quarterly rise in the last two years, is set to dampen profits of such airliners like China Eastern Airlines (0670.HK) and China Southern Airlines Co (1055.HK).

($=6.8569 yuan)

(Reporting by Chen Aizhu)