Jet fuel
Overview
Jet fuel market volatility, whether from crude prices, supply issues from refining capacity, or ongoing regulation changes, is a continual risk to your bottom line.
Having a choice in fuel pricing is the best way to mitigate risk and stay on top of market changes. Argus constructs price indexation in a way that is appropriate for each market. By doing so, market participants can align their day-to-day operations, improve management of fuel costs and directly impact their net earnings.
Jet fuel makes up more than 40% of an airline’s total operating expense. The rise in importance of sustainable aviation fuel (SAF) from government mandates and self-regulations from airlines has a direct implication on these operating costs.
Argus helps the jet fuel market participants to make informed decisions and optimize their strategies with price assessments and information on deals done for conventional jet fuel and SAF, as well as the latest market-moving news, in-depth analysis, supply and demand dynamics, and price forecasts.
Latest jet fuel news
Browse the latest market moving news on the global jet fuel industry.
Australia’s Qantas flags higher 2023-24 jet fuel costs
Australia’s Qantas flags higher 2023-24 jet fuel costs
Sydney, 22 February (Argus) — Australian airline Qantas Airways still expects to incur a record fuel bill in the 2023-24 fiscal year to 30 June, according to its half-year results. Its fuel costs are expected to be A$5.4bn ($3.54bn) at current fuel prices, inclusive of hedging, with 2023-24 jet fuel consumption, including sustainable aviation fuel, predicted to be 81,000 b/d or 19pc higher than the 68,000 b/d recorded in 2022-23. Qantas group's fuel expenditure in 2022-23 was A$4.6bn. New Airbus A321LR aircraft delivered to its budget subsidiary Jetstar are resulting in a 20pc improvement in fuel burn per seat, Qantas said, contributing to a 12pc unit cost improvement compared with the older A320 aircraft they will replace. The airline said this is helping it reach an interim emissions reduction target of 25pc by 2030 . Qantas ordered a further eight A321XLRs for domestic flights for a total order of 28, with the first aircraft arriving in early 2025. Qantas' domestic group capacity guidance for 2023-24 was left unchanged at 103pc of its pre-Covid-19 pandemic figure. But international capacity guidance, excluding Jetstar Asia, was revised down to 94pc from a previous 95pc. Jetstar Asia capacity will reach 42pc of the pre-Covid figure, Qantas said, up from a previous guidance of 40pc. Qantas' July-December profit after tax was A$869mn, down from A$1bn in the previous corresponding period, while revenue of A$11.1bn was up on the 2022-23 first-half figure of A$9.9bn. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Rengo starts trial 2G bioethanol production
Japan’s Rengo starts trial 2G bioethanol production
Tokyo, 20 February (Argus) — Japanese packaging firm Rengo has started a demonstration project to produce second-generation (2G) bioethanol, targeting 20,000 kilolitres/yr output by 2027. 2G bioethanol refers to ethanol made from non-edible resources such as biomass, while first-generation bioethanol is made from food resources such as sugarcane and corn. Rengo's subsidiary, Japanese pulp and paper producer Daiko Paper, and Tokyo-based bioethanol producer Biomaterial have started a demonstration project to produce bioethanol from unused biomass resources such as construction waste. The produced bioethanol will be used to produce sustainable aviation fuel (SAF), Daiko Paper said. The project is funded by state-owned research institute Nedo. Japan needs to develop technologies to ensure stable SAF production using domestic raw materials, in line with higher demand globally, as part of efforts to achieve decarbonisation by 2050. The country's trade and industry ministry Meti has set a goal to use 10pc SAF or 1.71mn kl/yr in domestic jet fuel consumption. Meti has encouraged domestic SAF production to enhance national energy security. Tokyo plans to spend around ¥340bn ($2.3bn) over a five-year period from 2024-25 to develop SAF production, leveraging its green transformation (GX) economic transition bonds. The GX bonds will supplement the country's public-private investments in SAF production and its feedstock supply chains, which is estimated to require more than ¥1 trillion over a 10-year period from 2023-24. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore flights to require SAF, impose levy from 2026
Singapore flights to require SAF, impose levy from 2026
Singapore, 19 February (Argus) — Sustainable aviation fuel (SAF) use will be required for flights departing Singapore from 2026 with a SAF levy also to be imposed, according to its sustainable air hub blueprint launched today. Singapore will aim for 1pc of SAF use by 2026, projected to rise to 3-5pc by 2030, subject to global developments and wider SAF availability and adoption, according to the blueprint launched by Singapore transport minister Chee Hong Tat at the Changi Aviation Summit. SAF use is expected to contribute to around 65pc of the reduction in emissions needed by aviation to achieve net zero by 2050, according to the International Air Transport Association. Singapore's jet fuel demand in 2019, prior to the Covid-19 pandemic, was around 8.43mn t (182,000 b/d), according to IEA data. Consumption is 2023 was likely lower with Changi Airport data showing 328,000 commercial aircraft movements against 382,000 in 2019. Demand will likely exceed 2019 levels by 2025, according to Argus Consulting projections. The blueprint, developed by the Civil Aviation Authority of Singapore (CAAS) in consultation with the industry and other stakeholders, sets out Singapore's action plan for the decarbonisation of its aviation sector. It will also be submitted this month to the International Civil Aviation Organisation as Singapore's state action plan. CAAS will also introduce a SAF levy to support the purchase of SAF to achieve its target. It will be set based on the SAF needed to achieve 1pc use and the projected SAF price in 2026. CAAS said the levy will not change even if the actual SAF price differs from the projected one, with the actual SAF uplifted adjusted instead, to provide cost certainty to airlines and travellers. The levy will vary based on factors such as distance travelled and the class of travel. CAAS projects that it could increase economy class ticket prices on a Singapore-Bangkok direct flight by around S$3 ($2.20), a Singapore-Tokyo flight by S$6 and a Singapore-London flight by S$16 to support 1pc SAF use in 2026. Passengers in premium classes will pay higher levies. CAAS will continue its consultation with stakeholders on the levy's implementation and will announce more details in 2025. CAAS this year will also work with stakeholders to start a trial on renewable diesel use for airside vehicles — especially heavy and specialised vehicles — to better understand the feasibility, cost and operational impact of using renewable diesel. The premium of fob Singapore SAF (class 2) prices over its conventional fob Singapore jet-kerosine counterpart has been narrowing from around $2,160/t in early October last year to $1,866/t as of mid-February, according to Argus assessments. The premium of RED hydrotreated vegetable oil fob Singapore (class 2) premium over fob Singapore 10ppm (0.001pc) sulphur gasoil prices fell to record lows of $649/t on 14 February before widening slightly to $659/t on 16 February. Singapore also aims to reduce domestic carbon emissions from airport operations from 404,000t in 2019 to 326,000t by 2030. This translates to a total 119,000t of reductions by 2030 accounting for projected growth. By Sarah Giam Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
BP terminals low on fuel due to Whiting refinery outage
BP terminals low on fuel due to Whiting refinery outage
Houston, 13 February (Argus) — BP told wholesale fuel customers it is buying refined products on the market to meet contractual obligations amid the continuing outage of its 435,000 b/d Whiting, Indiana, refinery. Several BP terminals have run out of at least one product — such as gasoline, diesel or jet fuel — the company told buyers today, including its terminal at Chicago O'Hare International Airport in Illinois. BP told them it is buying refined products elsewhere in the market to supply customers. The refinery still has not restarted since a 1 February power outage , according to sources on the call, and shared no time line for the plant to return to normal operations. The company did not immediately respond to a request for comment. Whiting is the US midcontinent's largest refinery, producing about 238,000 b/d of gasoline, 95,000 b/d of diesel and 48,000 b/d of jet fuel. It supplies approximately 7pc of all asphalt in the US, according to BP. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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