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Domestic oil price jumps to approximately K2,000 per litre on global cues

Fuel oil prices inched higher, around K2,000 per litre in the domestic market on the devaluation of Kyat against the US dollar and a sharp increase in crude oil prices, the market data in the Yangon Region showed. According to a market observer, the rumours spreading in the domestic market, setting a sales limit at the retail stations, and panicked consumers’ buying are other problems of price hikes. The prices soared to nearly K2,000 for Octane 92, K2,025 for Octane 95, K2,320 for diesel and K2,350 for premium diesel on 2 May 2022.  On 1 January 2022, the prices stood at K1,390 for Octane 92, K1,440 for Octane 95, K1,375 for diesel and K1,385 for premium diesel.

According to the local fuel oil market, there is a large gap of K600-960 per litre within four months. The fuel oil price is highly correlated with the foreign exchange rate. The exchange rate is now pegged at around K2,000 at the unofficial exchanges. When a dollar was valued at only K1,330 in early February 2021, the fuel oil was estimated at K590 per litre for Octane 92, K610 for Octane 95, K590 for diesel and K605 for premium diesel then in the domestic retail market. Additionally, domestic oil prices are positively related to the global market. Oil prices jumped in the worldwide market as the Russia-Ukraine crisis escalated, with US$104.2 per barrel for WTI crude and $106.5 for Brent crude at present.

Additionally, the Central Bank of Myanmar has directly sold over $87 million to the fuel oil sector so far.
Myanmar has inventories of about 45 million gasoline and 70 million diesel. According to the Petroleum Products Regulatory Department under the Ministry of Electricity and Energy, there is no need to worry about a shortage of fuel oil. Myanmar imports oil from Singapore, Malaysia and the Republic of Korea. The rumour raised the concerns of the consumers and resulted in panic buying. Consequently, the Petroleum Products Regulatory Department stated that the retail stations were out of hand. Usually, Myanmar yearly imports six million tonnes of fuel oil from external market, the Ministry of Commerce stated. 

Source: The Global New Light of Myanmar

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