New Delhi (Mizzima) – Petrol prices have risen as much as 250 per cent in the three weeks since the Burmese junta started rationing fuel supply to filling stations, a fuel retailing manager said.
Prices had risen from 1,000 kyat (about US$1) to 3,500 kyat per gallon, and since early this month, stations had limited sales to around four gallons a day, the manager from diesel retailing company, Max Myanmar, told Mizzima.Stations sell petrol at the government-fixed price of 2,500 kyat per gallon, which had led to a re-emergence of the fuel black market, in which prices had hit as high as 3,500 kyat per gallon.
“The companies were rationing at three to four gallons per day per vehicle and then the petrol price rose on the black market. Even some drivers who hardly use their cars came to buy petrol at the government-fixed price then resold it at a profit,” the petrol retailing manager said.
Private stations had been selling unlimited volumes allowing owners to fill their tanks, but in the past two weeks, the sales cap of between two and four gallons per day per vehicle had been imposed, depending on which retail company was involved.
“Commercial vehicles suffer the most. We get only two gallons a day and we have to buy the required amount from the black market at a price of 3,400 kyat. So we are the worst hit. It takes at least … 1½ hours in a queue to make each purchase. It has caused us great inconvenience,” a car owner in Rangoon told Mizzima.
The government had been unable to supply the full demand at a subsidised price and it dared not fully liberalise the market by selling at market price, so it had only one option – limit supply, economist Khin Maung Myo (Economics) said.
“We can’t say they will fully liberalise the market. The reason for fixing the current price … is to avoid the potential unrest arising from fuel-price increases and the flow on rise in bus fares and transport costs … On the other hand, the fuel is being supplied at the government-subsidised price to distributors, so that they had fixed the retail price again,” he said.
Though black economy fuel prices were rising after poor supply to retail companies and consumers were facing difficulties associated with the shortages, the diesel market was stable, the Max Myanmar manager said.
“There’s no problem with diesel supply and … unlimited sales are available. We sell even in a drum or jerrycan. We directly import diesel so there is no problem in the retail market,” the Max Company manager said.
According to Central Intelligence Agency (CIA) estimates, the daily consumption of crude oil in Burma is 43,140 barrels and daily production is 21,900 barrels.
After monopolising fuel imports and distribution in the retail market for nearly four decades, the government liberalised distribution by privatising 260 of 272 filling stations on June 10 this year.
