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Pain at the pump for Myanmar motorists as fuel shortage sends prices soaring

A fuel shortage has forced gas stations to close in major cities in Myanmar and sent prices soaring to their second highest level since the coup, prompting criticism that the junta’s restrictions on imports and manipulation of the exchange rate are to blame.

On Friday, the Fuel Import, Storage and Distribution Supervision Committee under the junta’s Ministry of Energy announced that fuel shortages had driven prices up by 600 kyats (U.S. $0.30), or nearly 40% in the five days since Aug. 7.

A liter (.25 gallons) of diesel and 92 octane that cost an average of 1,970 kyats (U.S. $0.94) and 1,615 kyats (U.S. $0.77) on Sunday cost 2,550 kyats (U.S. $1.21) and 2,245 kyats (U.S. $1.07), respectively, on Friday.

The shortage driving up prices has led gas stations in major cities in most states and regions, including Myanmar’s largest cities Yangon and Mandalay, to close as they run out of fuel supplies, while others have been forced to limit their sales.

Sources told RFA Burmese that procuring fuel had become a nightmare.

“This morning, when I went looking for fuel, I found some shops selling only diesel oil, some shops selling 95 [octane] and some shops closed,” said a resident of northern Shan state’s city of Muse, near Myanmar’s border with China.

“Some shops outside the city limits sell 92 octane for 2,850 kyats (U.S. $1.36) a liter, and they were selling 2,000 kyats (U.S. $0.95) worth to each motorcycle, and 20,000 kyats (U.S. $9.53) worth to each car. There were also roadside vendors selling small bottles of gas at various prices.”

The resident, who spoke on condition of anonymity, said that motorists in Muse had to pay anywhere from 7,000 to 10,000 kyats (U.S. $3.33 to $4.76) for a 1.5 liter bottle of fuel “depending on the vendor,” while smaller bottles were selling for anywhere between 3,000 to 5,000 kyats (U.S. $1.43 to $2.38).

He called the fuel situation “the worst I’ve ever seen in my life.”

Other sources told RFA that crucial services provided by charity organizations to make up for the junta’s shortfall in administration were being curtailed as a result of the shortage.

A spokesman for a Yangon-based charity group that provides assistance to those in need of medical care told RFA that he had been forced to turn away requests for lack of fuel.

“In our work, it’s hard to refuse when you get a call from a patient,” he said. “I can’t help wondering if a person had called because they were desperate and really needed us.”

The spokesman said that even when the price of fuel is affordable, organizations like his don’t have enough money to buy more than what can fit in their gas tanks.

“When the prices rise, we have much bigger problems to deal with,” he said.

A driver fuels his vehicle in Yangon, Myanmar, Aug. 12, 2022. Credit: RFA
A driver fuels his vehicle in Yangon, Myanmar, Aug. 12, 2022. Credit: RFA

Junta mismanagement

Despite domestic fuel shortages and skyrocketing prices, junta chief Snr. Gen Min Aung Hlaing on Aug. 8 announced to a governmental work coordination meeting that the regime is seeking to reduce expenditures by cutting down on its U.S. $1.3 billion annual imports of oil and petroleum products.

A fuel distributor, who declined to be named for security reasons, said the fuel shortage and rise in prices is the result of the junta’s restrictions on foreign imports.

“The dollar has become so scarce that procuring gasoline has become difficult. When a certain amount becomes available, we are forced to buy it as a group and later divide it among ourselves,” he said.

“In the past, we made the purchases ourselves, individually, not as a group. … We can’t do that anymore. Instead, we have to get our supply through the [junta]. It’s going to get worse if things continue this way.”

Economists told RFA that the fuel shortage is also the result of controls and fixed U.S. dollar exchange rates set by the junta.

One U.S. dollar cost 1,850 kyats in April, but the junta changed the rate to 2,100 kyats on Aug. 5.

“Since the official rate has risen, the price of imports will surely go up. And as fuel oil is one of the imports, other prices of imports will also go up,” said one economist, speaking on condition of anonymity.

“I believe that’s why they changed the exchange rate, so that fuel importers would be able to get supplies. Otherwise it’d be too difficult because the price is too different.”

Economists also noted that the rising cost of fuel is increasing prices across the board for other basic goods as transportation becomes more expensive.

Attempts by RFA to contact the Ministry of Energy’s Fuel Import, Storage and Distribution Supervisory Committee for comment went unanswered Friday.

According to gas station records, on Jan. 31, 2021, the day before the military seized power in a coup, a liter of diesel cost 720 kyats (U.S. $0.34), a liter of 92 octane cost 695 kyats (U.S. $0.33), and a liter of 95 octane cost 815 kyats (U.S. $0.39).

Shortages have caused fuel prices to rise steadily since the coup.

By May 31, 2022, diesel cost 2,330 kyats (U.S. $1.11) per liter, 92 octane cost 2,225 kyats (U.S. $1.06) per liter, and 95 octane cost 2,340 kyats (U.S. $1.11). Many gas stations ran out of fuel.

In early July, fuel prices began to drop but never went below 1,650 kyats (U.S. $0.79) per liter.

Translated by Khin Maung Nyane. Written in English by Joshua Lipes.