MYANMAR imported more than US$1.77 billion worth of petroleum products in the past eight months (Oct-May) of the current financial year 2020-2021, as per the Myanmar Customs Department.
Normally, a monthly oil import is estimated at $400 million, yet the oil importers are facing the pandemic induced container shortage problem in maritime trade and the banking restriction. Nevertheless, oil importers via land border can use informal payment Hundi system instead, said an importer.
At present, the domestic fuel oil price is still bullish as the heightened coronavirus restriction sparked oil demand concerns, coupled with Kyat depreciation.
The fuel oil was pegged at around at K620 per litre for Octane 92, K750 for Octane 95, K660 for diesel and K670 for premium diesel in early February 2021 in domestic retail market.
On 18 August, it rallied to the highest of K1,105 for Octane 92, K1,125 for Octane 95, K1,050 for diesel and K1,055 for premium diesel, according to local fuel oil market.
Domestic oil price is positively related to global market and the dollar value. The soaring demand drives up the oil prices rally higher, with WTI slightly falling to $66,393 per barrel.
Additionally, foreign exchange rate also affects the petroleum price. Kyat is weakening in the local forex market, with around K1,650 per dollar on 18 August. In mid-February, a dollar was worth only K1,430.
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, the Myanmar Petroleum Trade Association stated.
In early June 2021, the Ministry of Electricity and Energy notified the private sector of keeping the oil storage above 35 per cent of storage capacity of the tanks to avoid the possible discrepancy between demand and supply.
Last year, the domestic oil prices have declined starting from January owing to a fall in global oil prices. On 8 Jananuary 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.—KH/GNLM