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The National Development and Reform Commission (NDRC), together with the Civil Aviation Administration of China (CAAC), said in a statement on its website that the fuel surcharge keep abreast with China's jet fuel comprehensive purchasing costs.
The new mechanism, which would take effect on Nov. 14, aims to "help the airlines with fluctuating fuel prices", as jet fuel costs usually account for 40 percent of the total costs of China's airline companies, said the statement.
Under the new mechanism, airline companies could decide themselves whether to charge fuel surcharge and how much to charge if jet fuel comprehensive purchasing cost, which is the weighted average of domestic factory-gate prices for jet fuel and prices of imported fuel, reaches certain level.
Currently, the surcharge level was set uniformly by the government.
According to the new mechanism, when jet fuel comprehensive purchasing cost is lower than 4140 yuan per tonne, the benchmark price of jet fuel, airline companies should not charge fuel surcharge.
When jet fuel comprehensive purchasing cost exceeds the level, the companies should digest at least 20 percent of the rising cost and then charge appropriate surcharge, the statement said.
Also, fuel surcharge should be reduced or canceled within five days after jet fuel comprehensive purchasing cost drops, it said.
China raised gasoline and diesel prices both by 480 yuan (70.28U.S. dollars) per tonne Tuesday. The benchmark price of gasoline reached 7,100 yuan a tonne and that of diesel 6,360 yuan a tonne, according to the NDRC.