Burmese Gas Firm Official Confirms Plans for Doubling of CNG Price

By San Yamin Aung 22 September 2014

RANGOON — The price of compressed natural gas (CNG), which is used in almost all public buses and many taxis in Rangoon, will rise by 100 percent, but likely not until sometime next year, an official from the Myanma Oil and Gas Enterprise says, denying local media reports that the price hike would take place effective Oct. 1.

Local media reported last week that the CNG price would be doubled from the beginning of next month, but Burma’s Ministry of Energy denied those reports on Friday, posting on its Facebook page that any change in the fuel price would occur only after informing the public in advance.

“All CNG filling stations were saying that the price would increase to double on October 1. But I heard the officials denied it. We are not sure now. So, we have to wait and see on October 1,” Win Shein, a taxi driver from Rangoon’s Thuwanna Township, told The Irrawaddy on Monday.

An official from the Myanma Oil and Gas Enterprise (MOGE), which operates under the auspices of the Ministry of Energy, confirmed that MOGE had presented a proposal to the ministry early this year that would see the price of the fuel double, citing the fact that the state-run company is currently selling CNG at a loss.

“We are selling the CNG for four times cheaper than the current gasoline price. So we planned to increase up to double,” said the official, who asked not to be named.

The current CNG price is about 273 kyats (US$0.27) per kilogram.

“The ministry will submit [the price hike proposal] to Parliament and we will increase the price after that. But it wouldn’t be rising this year, since there is not much time left in the year and the ministry still hasn’t yet submitted the price change proposal to Parliament,” the MOGE official said.

Win Shein, the taxi driver, said that if the price of CNG were to double, there would be little difference between the operating costs of CNG- versus gasoline-fueled taxis. Currently, CNG-fueled taxis are significantly cheaper to operate than their gasoline-fueled counterparts.

“The gasoline-fueled taxis avoid the places of traffic jams like downtown because if they have to spend more time in traffic, that’s more money on fuel. If the CNG price were to double, we would have to avoid the places with traffic jams too,” he said.

He said that currently he spends 5,000 kyats to fill his CNG tank per day, and that gasoline-fueled taxis spend 10,000 to 12,000 kyats on fuel daily.

“If it is doubled, I’ll have to pay 10,000 [kyats] for gas,” he said, adding that buses, which spend around 16,000 kyats per day on CNG, would also be affected.

“The buses’ fees will likely increase too,” Win Shein said.

CNG is sold by MOGE at 45 filling stations nationwide: 40 in Rangoon and five in central Burma, in and around Mandalay. A program to convert vehicles to CNG was initiated in 1986 and was renewed in 2004, corresponding to respective spikes in the international price of oil. Thousands of buses, taxis and other vehicles were converted under the direction of the Burmese government.

The official from MOGE said that although the domestic price of CNG was likely to double, even such a hike would still compare favorably to other countries. In Singapore, the Philippines and Cambodia, CNG is sold at the equivalent to more than 1,000 kyats per kilogram.

“Since they [other countries] are importing the CNG, the price is much higher,” he said.

The taxi driver, Win Shein, said the Burmese government claimed when the CNG program was launched that the country’s CNG reserves would last for 90 years, allowing for its sale at a rate well below the regional market price.

“They started selling it at around 54 kyats per kilogram. After that, they increased it five times up to 273 kyats,” he added.

There were 26,848 CNG-fueled vehicles registered through 2008, according to the MOGE. The government capped the conversion of vehicles to CNG after that, allowing only for the one-off conversion of an additional 289 buses in 2013.