Fuel prices have increased as the junta-controlled Central Bank of Myanmar (CBM) is unable to sell US dollars to fuel importers to enable them to make purchases.
The CBM pays importers at the official rate of 2,100 kyats per dollar while Monday’s market rate was around 3,400 kyats. Fuel prices have gone up since early December as importers calculate prices at the market rates.
Fuel importers need the approval of junta committees, including the Central Committee on Ensuring Smooth Flow of Trade and Goods, to import fuel and buy dollars at the official rate.
A fuel import manager told The Irrawaddy: “Previously, the CBM sold dollars for 40 percent of the value of Ron 92 and 95 imports at the official rate and importers bought dollars from the market to import the remaining 60 percent. But the CBM can no longer sell dollars for the 40 percent and importers have to buy at the market rate for 100 percent of the imports. That’s why prices have shot up.”
The Supervisory Committee on Fuel Imports, Storage and Distribution set the retail prices of 92 Ron octane and 95 Ron octane at 2,510 kyats and 2,640 kyats respectively in Yangon on Monday, up from 2,170 kyats and 2,300 kyats on November 30.
Prices are slightly higher in other cities, depending on their distance from the Yangon distribution hub.
A Yangon filling station chief said: “The reference price is set by the government. We have to sell at that set price.”
The CBM continues to sell dollars for 50 percent of diesel imports and diesel prices have not increased.
The Union of Myanmar Federation of Chambers of Commerce and Industry recently told factory owners to import fuel independently, according to business insiders.
There are concerns about fuel shortages on social media as queues have lengthened at filling stations.
Myanmar experienced fuel shortages in November when importers could not fully pay in dollars, causing delays unloading fuel tankers at Yangon ports.
Junta boss Min Aung Hlaing told his cabinet last Wednesday last week that legal action was taken against eight fuel importers involved in price gouging and several other importers that slightly increased their selling prices.
Junta officials had been prosecuted for abuse of power and two former members of the junta’s governing body, the State Administration Council, were severely punished, said Min Aung Hlaing.
