China’s biggest oil refiner, Sinopec Group, is reportedly in talks to acquire China National Aviation Fuel Group Co (CNAF), the country’s main jet fuel supplier, according to sources familiar with the matter.
The discussions, initiated by Beijing, are part of efforts to streamline the nation’s energy and fuel distribution sectors, said the sources, who requested anonymity as the talks remain private. The negotiations are ongoing, with no fixed timeline or assurance that a deal will be finalised.
Sinopec — also known as China Petrochemical Corp — refines both imported and domestic crude oil and currently supplies jet fuel to CNAF, which oversees the nation’s airport refuelling network. CNAF also manages imports and exports of jet fuel through subsidiaries, including its 51%-owned China Aviation Oil (Singapore) Corp.
If the merger proceeds, Sinopec is expected to take over CNAF’s assets and operations, consolidating control over China’s jet fuel supply chain.
The potential merger comes as China’s aviation industry rebounds strongly from the pandemic, with flight activity surging and jet fuel demand projected to exceed 40 million tonnes this year — roughly one million barrels per day, valued at about US$30 billion (RM125.9 billion).
China Aviation Oil (Singapore) confirmed in a stock exchange filing that its controlling shareholder is undergoing a “corporate restructuring with another conglomerate,” though it did not name the other party. The company added that the restructuring remains subject to regulatory approvals and will not affect its daily operations.
Neither Sinopec nor CNAF have issued official comments regarding the merger discussions.
