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Research on the Effect of Marketization Reform on the Price of Aviation Kerosene in China

Author

Listed:
  • Xun Cao

    (School of Economics and Management, China University of Petroleum, Beijing 102249, China
    W.P. Carey School of Business, Arizona State University, Tempe, AZ 85287, USA)

  • Wenxin Li

    (School of Economics and Management, China University of Petroleum, Beijing 102249, China
    Business School, University of Edinburgh, Edinburgh EH8 9JS, UK)

  • Siqi Meng

    (China Institute of Marine Technology and Economy, Beijing 100081, China)

  • Xin Zhao

    (Business School, Henan Normal University, Xinxiang 453007, China)

  • Mianzhi Yang

    (School of Economics and Management, University of Science and Technology Beijing, Beijing 100083, China)

Abstract

The development of the aviation industry relies heavily on stable kerosene prices, and price fluctuations have an impact on its economic sustainability. To explore the effect of China’ s implementation of market-oriented reform of aviation kerosene prices, our study aims to evaluate the dynamic correlation between China’s aviation kerosene prices and Singapore’s CIF price, supply and demand, domestic economic development level and other market-oriented factors. To this end, in this paper, monthly data from 2006 to 2019 were selected for the variables mentioned above and, based on multiple econometric techniques, the influence of market factors on the price of aviation kerosene in China was studied. The empirical results confirm that the current Chinese aviation kerosene price has a significant linking effect with the CIF price of Singapore’s imports and is affected by the level of domestic demand. China’s aviation kerosene price is more affected by international oil and gas market factors relative to fundamental factors in the domestic market. The long- and short-term Granger causality test results also show that the market-oriented reform of China’s aviation kerosene field is beginning to take effect. Finally, the article discusses and puts forward suggestions for promoting China’s market-oriented price reform for refined oil products and the sustainable development of the aviation industry.

Suggested Citation

  • Xun Cao & Wenxin Li & Siqi Meng & Xin Zhao & Mianzhi Yang, 2024. "Research on the Effect of Marketization Reform on the Price of Aviation Kerosene in China," Sustainability, MDPI, vol. 16(5), pages 1-16, March.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:5:p:2104-:d:1350482
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    References listed on IDEAS

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