Myanmar braces for fuel price jump on 1 December

The fuel price spikes occurred on 1 December 2023, indicating a sharp rise of K340 per litre for Octane 92 and 95 within one day.
Fuel prices were K2,170 per litre of Octane 92 and K2,300 for Octane 95 on 30 November. Then, the prices rebounded slightly to K2,510 per litre of Octane 92 and K2,640 Octane 95 on 1 December.
Despite the rapid upside moves of Octane, diesel prices showed only a tiny increase to K2,210 per litre of diesel and K2,305 per litre of premium diesel on 1 December from K2,200 for diesel and K2,290 for premium diesel registered on 30 November.
The price index set by Mean of Platts Singapore (MOPS), the pricing basis for many refined products in southeast Asia, is closely tied to the domestic fuel prices, according to the Supervisory Committee on Oil Import, Storage and Distribution of Fuel Oil.
Last August 2022, the oil prices hit the highest of K2,605 per litre for Octane 92, K2,670 for Octane 95, K3,330 for premium diesel and K3,245 for diesel.
The committee has been, therefore, steering the fuel oil storage and distribution sector effectively so as not to have a shortage of oil in the domestic market. It has been issuing daily reference prices to ensure price stability for energy consumers.
The committee is inspecting the fuel stations to see whether they are overcharging. The authorities are taking action against those retailers of fuel stations under the Petroleum and Petroleum Products Law 2017 if they are found soaking rather than the set reference rate.
As per the statement, 90 per cent of fuel oil in Myanmar is imported, while the remaining 10 per cent is produced locally. The domestic fuel price is highly correlated with international prices. The State is steering the market to mitigate the loss between the importers, sellers and energy consumers. Consequently, the government is trying to distribute the oil at a reasonable price compared to those of regional countries.
Some countries levied higher tax rates and hiked oil prices than Myanmar’s. However, Malaysia’s oil sector receives government subsidies, and the prices are about 60 per cent cheaper than those of Myanmar. Every country lays down different patterns of policy to fix the oil prices. Myanmar also levies only a lower tax rate on fuel oil and strives for energy consumers to buy the oil at a cheaper rate. — NN/EM