Despite the junta’s call for residents of Yangon to refrain from panic buying of fuel, gasoline and diesel are now selling on the black market for double the price fuel stations charge as lines of vehicles waiting for fuel lengthened in Myanmar’s major cities this week.
“I have been waiting here at this Max petrol station for four hours,” a taxi driver in Yangon told The Irrawaddy on Thursday. “I just want to buy eight litres of Octane 95 gasoline, but I still have to continue waiting for my turn … at least four dozen cars are ahead of mine,” he added.
Throughout Myanmar, citizens are experiencing increasingly dire fuel shortages as the regime is no longer able to sell the US dollars importers need to buy fuel, residents and business sources said.
Lines of cars outside fuel stations are lengthening in major cities like Yangon, Mandalay and the capital, Naypyitaw, as residents wait hours to keep their cars running.
The regime ran out of US dollars to sell to importers of gasoline and diesel on December 1, sources said. Its central bank announced on December 5 that it would no longer set exchange rates for foreign currency transactions and allow the market to set them instead.
However, with the regime no longer selling US dollars, fuel importers have to buy the greenback at volatile market rates.
Moreover, the black-market trade of fuel is surging in Yangon, Mandalay and Bago regions, residents say. At the pump, the price of Octane 92 and 95 gas is 2,560, and 2,680 kyats per litre on Thursday, respectively, while premium diesel was selling for 2,200 kyats.
Prices are about double on the black market, with gasoline selling for at least 5,000 kyats per litre, residents of Yangon Region say.
On Wednesday, the junta warned residents of the region not to panic buy more fuel than they need.
Economists and businesspeople say the ongoing crises in the forex and fuel markets are caused by the junta’s failed attempts to control the exchange rate between the Kyat and the greenback after the February1, 2021 coup.
The greenback was selling for about 3,600 kyats in Yangon on Thursday, but businesspeople said it could jump up to 4,000 kyats in the coming weeks.
The regime eased it mandatory forex conversion rule for exporters from 50 percent to 35 percent of earnings on Wednesday. The rule requires exporters to convert a percentage of foreign currency earnings at the central bank’s reference rate.
The easing of the rule was labelled too little too late.
“The junta’s attempted to take control of the market by force and when it no longer had dollars in its hand, it told [people in] the market to use their own prices, but it has been too late,” economist U Moe said.
