Truck freight forwarding businesses thrive on diesel price slump

A drop in diesel price increased the profits of the truck freight forwarding businesses, the traders said.
From the second week of September 2022, the prices of diesel that are used in trucks have been declining. Diesel price stood at K2,615 per litre on 16 September.
On 26 August 2022, the diesel price rose to K3,225 per litre. Therefore, the price was down by K610 per litre, K2,792 per gallon (4.54 litres) and K140,000 per 50-gallon barrel in three weeks, a truck operator said.
Despite the price slide, the current price is still K635 higher than the rate (K1,970 per litre) recorded on 7 August.
The minimum prices of fuel oil stood at K1,615 per litre of Octane 92 and K1,970 per litre of diesel on 7 August. The fuel oil prices were estimated at K2,365 per litre of Octane 92 and K2,615 per litre of diesel on 16 September. The figures indicated a sharp drop of K750 for Octane 92 and K645 for diesel within three weeks, said U Htaw, a truck owner.
The amount of fuel consumed for the Yangon-Pathein Road (226 miles) by the six-wheel truck (16-tonne capacity) is 20 gallons of diesel. The truck operators can save around K50,000 per round for that route these days.
The profit also doubled to K100,000 for a round trip. Normally, the freight forwarding business does not prosper in the rainy season. When the fuel price slides, the operators can generate greater income. That being so, the truck owners are expecting not to have a price rise again.
After monsoon paddy in delta regions is harvested, rice delivery frequency to Yangon markets will go up for sure. Tracking the slide in fuel oil prices, the prices of some construction materials started to decrease to a certain extent, according to the construction materials market.
However, the prices of auto parts such as tires, lubricant oil, engine oil and brake fluid are still on the high side.
Last year, engine oil was priced at only K25,000 per five-litre container. The price doubled this month. Similarly, the prices of six-wheel truck tyres (steel wheel rim) 8.25-20 increased from K380,000 to K550,000 this month. Those truck tyres have a maximum lifespan of ten months with eight trips per month. About 10 litres of lubricant oil has to be used for a truck every month, Ko Oo, a truck owner, told the Global New Light of Myanmar (GNLM).
The freight cost for rice is still high at K1,100-1,200 per bag for the Pathein-Yangon Road in recent days. Only when the fuel oil price will not climb can the freight rate decrease, the GNLM quoted Ko Zaw, an owner of trucks, as saying.—TWA/GNLM