【2026 Industry Trends】Sinopec and AVIC Refueling Group undergo restructuring
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The restructuring of Sinopec Group Co., Ltd. and China National Aviation Fuel Group Co., Ltd. marks the beginning of the strategic restructuring and professional integration of central state-owned enterprises in 2026. This restructuring not only marks a \"powerful alliance\" between two major energy giants, but also sends a strong signal regarding the further advancement of reforms in state-owned enterprises and institutions, as well as the optimization of the layout and structural adjustment of the state-owned economy. This restructuring is not a spur-of-the-moment decision, but rather an important step within the overall trend of state-owned enterprise reforms in recent years, which focus on fulfilling core responsibilities and main tasks, as well as on enhancing core competitiveness through integration. As early as November 2025, signs of a restructuring process emerged; the company under China National Aviation Fuel Group that was listed on the Singapore Exchange issued a statement suggesting that the group would merge with another company, although the specific partner was not disclosed at that time. From an industrial perspective, Sinopec, as the world’s largest refining company and the second-largest chemical company, boasts substantial refining capacity as well as strong capabilities in securing oil and gas resources. China Aviation Fuel is the largest aviation transportation service provider in Asia, offering integrated services including the procurement, transportation, storage, testing, sales, and refueling of aviation fuels, with a sales network that covers the entire country. The combination of the two aims to address the current situation in our country, where tasks such as the production, sales, and refueling of aviation fuel are handled by different companies, resulting in a need to improve overall competitiveness.
Currently, the distribution of aviation fuel involves multiple inter-company steps, including production at refineries, procurement by China National Aviation Fuel Group, and refueling at airports. This entails various costs related to storage, transportation, and transactions, accounting for 15% to 20% of the final price. Through coordinated planning via the national aviation fuel pipeline and a precise matching of regional refinery capacities with airport demands following the restructuring, it is expected that unnecessary intermediate costs can be eliminated, thereby reducing the overall supply cost of aviation fuel. This integrated model will greatly enhance the stability and supply assurance capabilities of China’s aviation fuel supply chain in the face of external shocks such as extreme weather and geopolitical factors.
With the advent of the energy revolution and profound adjustments in the industrial structure, China’s energy market has undergone significant changes during the 14th Five-Year Plan period, presenting both challenges and opportunities. “Marketing should be treated as a vital project, with every effort being made to improve efficiency and effectiveness. ”Faced with the situation where market demand far exceeded expectations, the Party leadership group of the group company planned in advance and took proactive actions, aiming to seek growth and efficiency from the market as well as ensure survival and development. “During the 14th Five-Year Plan period, Sinopec will accelerate its efforts to become a comprehensive energy service provider offering oil, gas, hydrogen, electricity, and related services. By adopting a determined approach and fostering a strong sense of urgency, it will continue to enhance its core competitive advantages in the market and pursue an aggressive strategy in order to gain a competitive edge.
Faced with a complex market environment, Sinopec makes full use of its advantages in terms of high-quality and sufficient quantities of petroleum products, its network presence across urban and rural areas, and its brand strength as a major national enterprise. It focuses on developing the Aipao brand, expands partnerships for event-based marketing, seeks growth in the oil and gas market, and goes all out to increase sales, expand its market presence, and boost profitability.
As the two main players in this incident, Sinopec and CNPC hold pivotal positions in their respective fields. Public information shows that Sinopec is a super-large energy and chemical group company with integrated operations across the upstream and downstream sectors, as well as in production, supply, sales, domestic and international trade. It is currently the world’s largest oil refining company and the second-largest chemical company; it ranked 6th on the list of the world’s top 500 companies in 2025. The company has 9 listed subsidiaries, covering the entire energy industry chain including oil and gas exploration, oil refining and chemical manufacturing, and equipment production. As Asia’s largest enterprise group providing comprehensive aviation transportation service support, covering the procurement, transportation, storage, testing, sales, and refueling of aviation fuels, China National Aviation Fuel Group operates in five main areas: aviation fuels, petroleum, logistics, international operations, and general aviation. Its subsidiary, China Aviation Fuel (Singapore) Pte. Ltd., was listed on the main board of the Singapore Exchange on December 6, 2001. In fact, the two companies have had numerous collaborations throughout their history. In the view of industry insiders, the drive for this comprehensive restructuring stems from both internal and external pressures and opportunities.
From an internal perspective, this is a planned step in deepening the reform of state-owned assets and enterprises as well as optimizing the allocation of state capital. In line with the requirements of the 14th Five-Year Plan to advance market-oriented reforms in key sectors such as energy, railways, and telecommunications, professional integration can effectively prevent duplicate investment and homogeneous competition, enabling resources to be concentrated in enterprises and core businesses with competitive advantages.
The \"2026 Report on the Development of China’s Energy and Chemical Industry\" released recently by the Sinopec Research Institute of Economics and Technology indicates that, in China’s future consumption structure for refined petroleum products, aviation kerosene will be the only area showing growth. According to S&P’s projections, China’s aviation fuel consumption will rise to 75 million tons by 2040. “Following the merger of the two companies, they will be able to leverage advantages such as integrated refining and petrochemical operations, as well as a robust aviation fuel supply system, in order to reduce supply costs and enhance the resilience of the aviation kerosene industry chain. ”Experts point out that by acquiring AVIC Oil, Sinopec can gain direct access to the aviation fuel sales channels, thereby creating an integrated closed loop that covers everything from crude oil refining to aircraft refueling. For China National Aviation Fuel, it also has a more stable and reliable upstream supply.
From an external perspective, this is an urgent need to address complex situations and enhance international competitiveness. It is understood that the major international suppliers of aviation fuel are currently integrated petrochemical companies such as Shell, BP, and ExxonMobil. These global energy giants began to engage in the aviation kerosene industry at an early stage; they now have large production capacities, strong infrastructure, well-developed sales networks, and have established a integrated model for production, supply, and distribution, giving them significant competitive advantages.
In our country, the production, sales, and refueling of aviation fuel are carried out by different companies, and the overall competitiveness in this area still needs to be improved compared to international major aviation fuel service providers. Following the merger of the two companies, their complementary strengths enable the aviation fuel industry to become stronger, higher-quality, and larger, thereby enhancing its competitiveness. Furthermore, it will also unlock tremendous potential in terms of green transformation.
The aviation industry’s carbon emissions represent the most challenging area for emission reduction in the transportation sector, and sustainable aviation fuel (SAF) is recognized as the main approach to achieving reductions. The International Civil Aviation Organization and several other entities have announced targets for reducing aviation emissions by 2050, along with policies to support the use of SAF. Data from the International Air Transport Association show that global SAF consumption will be 6 million tons in 2025, rising to 18 million tons by 2030.
Following the merger of the two companies, they will leverage their strengths in areas such as technology research and development, industrialization capabilities, storage, transportation, and refueling, as well as international trade, within the context of SAF. This will facilitate the research, use, and continuous improvement of SAF, promote high-quality development of the industry chain, and help the aviation sector reduce emissions and carbon footprints. The restructuring of Sinopec and CNPC is not an isolated case. Looking back at the 14th Five-Year Plan period, state-owned assets and central enterprises made significant efforts to optimize their structural layout, focusing on strategic security, industrial leadership, national economy and people’s livelihood, as well as public services. They reorganized 6 groups of 10 enterprises through market-based approaches, and established 9 new central enterprises such as China Star Network and China National Electrical Apparatus Corporation.