The domestic fuel oil price in the last week of September tremendously increased to double compared with the price recorded in the past eight months, Myanmar Petroleum Trade Association’s price data showed. The coronavirus impacts and the remarkable global rally led to the price rises, coupled with the devaluation of Kyat in the forex market. The fuel oil was pegged at around at K590 per litre for Octane 92, K610 for Octane 95, K590 for diesel and K605 for premium diesel in early February 2021 in domestic retail market. Then, it remarkably climbed up to K1,235 for Octane 92, K1,275 for Octane 95, K1,230 for diesel and K1,249 for premium diesel on 26 September 2021, according to local fuel oil market.
Domestic oil price is positively related to global market. Oil price inched higher in the global market at US$73.98 per barrel for WTI crude and $78.09 for Brent crude on 26 September. Additionally, foreign exchange rate also affects thepetroleum price. The Kyat continues to weaken in the local forex market in September, rising above K2,100 per dollar. In mid-February, a dollar was worth K1,430 only. Myanmar imported nearly $2.3 billion worth fuel oil in the past ten months (Oct-July) of the current financial year 2020- 2021, according to the Ministry of Commerce. Normally, a monthly oil import is estimated at $400 million, yet the oil importers are facing banking restrictions for maritime trade besides Kyat depreciation. Oil importers via land border can use informal payment Hundi system instead, said an importer.
Normally, Myanmar imports fuel oil primarily from Singapore, with monthly volumes touching 200,000 tonnes for gasoline and 400,000 tonnes for diesel. There are about 2,000 fuel stations and over 50 oil importer companies in Myanmar, Myanmar Petroleum Trade Association stated. Last year, the domestic oil prices have declined starting from January owing to a fall in global oil prices. On 8 January 2020, oil prices were pegged at around K905 per litre for Octane 92, K995 for Octane 95, and K985 for diesel and premium diesel. Following the global market crashing, the domestic oil price plunged to more than 50 per cent in April against January’s prices. In late April 2020, the oil prices touched the lowest of K290-330 per litre for Octane 92, K430-455 for Octane 95, K435- 465 for diesel, and K445-475 for premium diesel, according to the domestic oil market. Ninety per cent of fuel oil in Myanmar is imported, while the remaining 10 per cent is produced locally.
Source: The Global New Light of Myanmar