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The State-owned Assets Supervision and Administration Commission (SASAC) approved the merger of China Petrochemical Group (Sinopec) and China Aviation Oil Group (CNAF) to enhance competitiveness in the aviation fuel supply chain. This restructuring aligns with China's 15th Five-Year Plan, aiming to consolidate state-owned enterprises.

The merger is expected to streamline operations from crude oil refining to jet fuel supply, reduce costs, and support the transition to sustainable aviation fuel (SAF). Analysts predict this could lead to lower fuel prices and strengthen China's aviation industry's carbon reduction efforts.

CNAF, which supplies all domestic airlines, will benefit from more stable upstream resources, while Sinopec will expand its sales channels. The merger is seen as a significant move in optimizing state capital allocation and improving supply chain stability.