Sinopec and CNAF to Implement Restructuring

On January 8, the Chinese government approved a restructuring between Sinopec and China National Aviation Fuel Group (CNAF), marking a major consolidation in China’s aviation fuel industry chain.

CNAF is the principal entity responsible for aviation fuel supply in China and has long played a dominant role in the procurement, storage, transportation, quality inspection, and airport into-plane refueling services nationwide, covering the vast majority of Chinese airports. Its wholly owned subsidiary, China Aviation Oil (Singapore) Corporation Ltd. (CAO), undertakes most of China’s aviation fuel imports and international trading activities, and operates into-plane refueling facilities at a number of overseas airports.

Sinopec, one of the world’s leading refining and petrochemical companies, is also a key producer of aviation fuel in China, responsible for the refining and supply of petroleum products, including aviation kerosene.

The restructuring will be carried out through an absorption merger, under which CNAF will be incorporated into a unified organizational structure together with Sinopec. This integration brings together the previously segmented refining and production segment and the aviation fuel supply and distribution segment, enabling deep vertical integration across the supply chain. The move is expected to dismantle existing structural barriers, reduce coordination and transaction costs, and enhance overall operational efficiency.

As China’s aviation fuel market continues to expand—with demand projected to nearly double over the coming decade—this restructuring is widely viewed as a systematic reshaping of the entire aviation fuel value chain. Following the integration, Sinopec’s extensive refining capacity combined with CNAF’s nationwide terminal and airport service network is expected to create strong synergies, significantly improving supply security and risk resilience.

The restructuring is also expected to accelerate the development and deployment of sustainable aviation fuel (SAF) and other low-carbon aviation energy solutions. Sinopec has already established capabilities in the research, development, and production of green aviation fuels. Leveraging CNAF’s market access and airport infrastructure, the combined entity is well positioned to speed up the commercial application of SAF across China’s airport network.

Industry observers note that this restructuring represents more than a corporate realignment; it constitutes a comprehensive optimization of China’s aviation fuel industry chain. The integrated system will span the full spectrum of activities—including refining, supply, storage, logistics, and into-plane refueling services—enhancing the sector’s ability to respond efficiently to future demand growth and improving overall market responsiveness.

At present, all related operations remain stable and will be gradually integrated into Sinopec’s broader corporate framework. While specific implementation details have yet to be disclosed, the restructuring clearly signals China’s strategic direction toward consolidation and optimization of critical energy supply chains.