Soaring fuel price hits K3,000 per litre of diesel

Soaring fuel prices reached a record high of K3,000 per litre of diesel, according to market research on the petrol and fuel industry.
On 23 August 2022, the prices of domestic fuel prices stood at K2,390 per litre for Octane 92, K2,480 for Octane 95, K2,940 for premium diesel and K2,865 for diesel. The prices increased to K2,440 for Octane 92, K2,525 for Octane 95, K3,080 for premium diesel and K3,000 for diesel on 24 August, showing a small increase of K50 per litre of Octane 92 and 95 and K140 per litre of diesel and premium diesel within one day.
“Fuel prices are volatile. The market sees a small decline yet a big jump in fuel prices. We are struggling with the rising price,” a taxi driver told the Global New Light of Myanmar.
The Supervisory Committee on Oil Import, Storage and Distribution of Fuel Oil stated that the domestic fuel price follows the price index set by Mean of Platts Singapore (MOPS), the pricing basis for many refined products in southeast Asia.
The Central Bank of Myanmar raised the reference exchange rate for a dollar from K1,850 to K2,100, whereas the exchange rate against the US dollar hit K2,900 in the grey market.
The fuel price experienced an upward spiral shortly after Kyat devalued at K3,000 against the dollar in early August. Consequently, some fuel stations in regions and states allegedly faced a shortage of supply.
Nonetheless, some petrol stations are allegedly suspending fuel sales and setting limited sales on the possible shortage of fuel oil, sparking consumers’ concerns and raising fuel prices. They are taking advantage of the consumers’ concerns for their benefits, according to the statement released by the Central Committee on Ensuring Smooth Flow of Trade and Goods on 16 August.
The committee has assured adequate fuel supply until this month. It is also working together with Myanmar Petroleum Trade Association to ensure a steady fuel supply in order for the energy consumers to mitigate concerns.
Therefore, the consumers can complain about the halt in fuel sales and limited sales through the contact numbers of the respective regions and states if they find those stations that violate the rules, the committee stated.
The committee is governing the fuel oil storage and distribution sector effectively not to have a shortage of oil in the domestic market and ensuring price stability for energy consumers.
The Petroleum Products Inspection and Supervision Department, under the guidance of the committee, is issuing the daily reference rate for oil to offer a reasonable price to energy consumers. The reference rate in Yangon Region is set on the MOPS’ price assessment, shipping cost, premium insurance, tax, other general costs and health profit percentage.
The rates for regions and states other than Yangon are evaluated after adding the transportation cost and the retail reference rates daily cover on the state-run newspapers and are posted on the media and official website and Facebook page of the department on a daily basis starting from 4 May.
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. However, Malaysia’s oil sector receives government subsidies and the prices are about 60 per cent cheaper than in Myanmar. Every country lays down different patterns of policy to fix the oil prices. Myanmar also poses only a lower tax rate on fuel oil and strives for energy consumers to buy the oil at a cheaper rate. — NN/GNLM