Myanmar raises fuel prices by a huge 500%

Yangon: Myanmar's secretive military government raised fuel prices by up to 500 per cent without warning yesterday.

Worst hit was compressed natural gas (CNG), a relatively safe fuel environmentally which Myanmar has in abundance and exports in large quantities, rising from 54 kyat per kg to 273 kyat per kg, the manager of a government-owned service station said.

Black marketing

The kyat's official exchange rate is six to the dollar, but the currency changes hands on the black market at about 1,300 kyat.

There was no official announcement of the rises, but the manager said the energy ministry had ordered vendors to charge the new prices immediately. "Petrol prices have gone up from 1,500 kyat to 2,500 kyat per gallon and diesel prices from 1,500 kyat to 3,000 kyat," the manager said.

Prices of the Asian benchmark 92-octane gasoline, have stayed firm above $80 a barrel for past five months, compared with $70-$79 or below in the first quarter. Gas oil also held above $80 a barrel during the same period, up from less than $68 in mid-February.

Global benchmark U.S. crude prices jumped to a record high of $78.77 a barrel on August 1 before easing to $72.85 yesterday.

The suddenness of the rise kept some CNG taxis off the roads of Yangon, the former Burma's commercial capital, because drivers had not received a new fare tariff and had no idea what they were allowed to charge.

"We haven't been given any instructions about how much we should charge. I just don't know what to do and decided not to run today," one said.

Commuters struggle

Ordinary commuters were also taken by surprise. "This morning, I had to pay 200 kyat, up from 100 kyat yesterday," one woman said after alighting from a Yangon bus.

The service station manager said the monthly quota of fuel vehicle owners were allowed to buy in Yangon remained at 60 gallons.

"I don't know the new quota in the provinces. I'm sure they will be far smaller than this," he said.

A car owner who needs more than the 60 gallons from a government-owned station has to turn to the black market, where prices were about double the official rate on Tuesday.

The last time isolated Myanmar, which has been ruled by the military since 1962, raised fuel prices was in October 2005, when diesel prices were increased from 160 kyat to 1,500 kyat and petrol from 180 to 1,500 kyat.