Myanmar Raises Fuel Prices to Record High

Myanmar raises fuel prices to record high

YANGON, Oct. 20 (Xinhua) — The Myanmar authorities Thursday raised the official fuel prices by nearly 900 percent to a record high of 1,500 Kyats (1.22 US dollars) from the previous 180 Kyats (0.14 dollars) per gallon for petrol and from 160 Kyats (0.13 dollars) per gallon for diesel.

Despite already rise of world oil prices, Myanmar had maintained constant supply of fuel domestically at a heavy subsidized previous prices with a quota of 2 gallons per day per car.

Although the new fuel prices are still lower than the world market prices, the controlled supply quota remains unchanged but still arouses general worry about the hike of commodity prices to a wider scale impacted by the rise of fuel prices.

With the raising of the official fuel prices, the black market prices have also soared to about 3,500 Kyats (2.84 dollars) per gallon for petrol and about 4,500 Kyats (3.65 dollars) for diesel from between 1,500 Kyats and 2,400 Kyats which had prevailed over the past few years.

Meanwhile, Thursday’s fares of buses running in Yangon also went up by about 300 percent and commodity prices are also threatening to soar, according to city dwellers.

So far, government media have not yet made any clarification over the fuel prices adjustment and announced any measure to cope with the situation.

With a total of about 900,000 motor vehicles moving in the country now, of which over half are motorcycles, Myanmar’s petrol consumption has at least doubled in the past decade as registered, consuming about 100 million gallons (420,000 tons) of petrol and about 340 million gallons (1.4 million tons) of diesel annually in most recent years.

Myanmar produced about 6 million barrels (798,000 tons) of crude oil annually at home, yet it could not meet the demand and had to import over 200 million dollars’ worth of diesel and crude oil per year.

Under an ambitious plan to modify all vehicles in the country in terms of fuel operation, the government is converting motor vehicles in the country to run on compressed natural gas (CNG) to substitute fuel and so far nearly all buses in the capital, which were traditionally operated on petrol and diesel, have been converted to run on CNG with the next step to be focusing on trucks and then private cars.

Myanmar started the fuel to gas conversion amid sustained rise of crude oil prices in the world and the plan was introduced due partly to the abundance of natural gas in the country which possesses a total of 87 trillion cubic-feet (2.46 trillion cubic meters) of gas reserve and 3.2 billion barrels of recoverable crude oil reserve.

Myanmar produced 9.9 billion cubic meters (BCM) of gas and 7.16 million barrels of crude oil in 2003-04. gas export during the year went to 5.66 BCM , earning nearly 600 million dollars.