“Russia is a major oil producer. There are two points we have to consider. First, prices must be cheap. Second, we must choose quality and get our oil supplies quickly,” Major General Zaw Min Tun, spokesperson for the State Administration Council (SAC), told a press conference.
The SAC spokesman revealed the information about oil import from Russia as local prices soar.
He said the option was made because Myanmar has good relations with Russian, which is one of the world’s biggest producers of energy sources.
As bilateral relations peak, we would have given a guarantee about this fuel oil,” Maj-Gen Zaw Min Tun commented.
However, he didn’t make a comment as to whether the prices might increase or decrease.
“When it comes to prices, we can purchase at will, I think they can be controlled,” he said.
The committee for purchase of Russian oil
The SAC has announced the formation of a steering committee for import, storage and distribution of Russian oil.
The steering committee is formed with Lt-Gen Nyo Saw as chairman, the deputy minister for energy, the permanent of secretary of the Ministry of Commerce, Star High Co Ltd CEO U Hla Win, Brighter Energy director U Hsan Naung, Best Oil Co Ltd chairman U Win Swe, director U Tin Ye Win of the Ministry of Commerce and Yetagon Energy Trading Co Ltd CEO U Maung Maung Naing as members, the director general of the Petroleum Products Regulatory Department as secretary and the general manager of Marketing & Research Department of Myanmar Economic Corporation as joint secretary.
Some memberships are found to be private businessmen and officials from Myanmar Economic Corporation.
The committee is tasked with importing fuel oil from Russian, storing and distributing it in accord with the State policies and economic policies and procedures depending on the national needs. To do the process, needs to cooperate with relevant government departments and private organizations, seek a monthly necessary amount of foreign currency from the State, supervise measures to ensure oil tanker arrive in time, and check quality and quantity and distribute fuel oil to the Tatmadaw (military), ministries and organizations. The steering committee also needs to make sure that importer companies meet the requirements issued by the Supervisory Committee on Import, Storage and Distribution of Fuel Oil formed by the Ministry of Commerce. The steering committee is to take responsibility for fulfilling other needs in addition to fuel oil and petrochemical products in line with the instructions of the SAC.
A turbulent fuel market
In mid-August, there were long queues at local filling stations while some stations ran out of stock.
Local fuel prices skyrocketed with 2,400 kyats per liter of 92Ron octane on August 21.
On August 16, the price of 92Ron octane was Ks2,365 per liter, that of 95Ron octane Ks2,445 per liter, that of premium diesel Ks2,780 per liter and that of diesel Ks2,700 per liter.
Local fuel oil prices have been increasing after the Central Bank of Myanmar changed the foreign currency reference exchange rate from 1,850 to 2,100 kyats per dollar as the national currency continues to weaken on August 5. The former reference lasted for four months.
Before August 5, the prices of a liter of 92 Ron cost Ks 1,615, a liter of 95 Ron cost Ks 1,665, a liter of Premium Diesel cost Ks2,025 and a liter of Diesel cost Ks 1,970. On August 8th , the prices of a liter of 92 Ron cost Ks 1,820, a liter of 95 Ron cost Ks 1,880, a liter of Premium Diesel cost Ks2,290 and a liter of Diesel cost Ks 2,225. Therefore, within 5 days, the prices were increased and the results, a liter of fuel prices were over Ks 200 higher.
Currently, Myanmar didn’t import the fuel from China via Sri Lanka and fuel mainly imported from Singapore, Malaysia and Korea. About 90% of fuel mainly imported from foreign countries for local consumption and only 10% can be produced at home. Before February 1st, 2021, the prices of a liter of 92Ron cost Ks.620, and a liter of 95 Ron cost Ks.750.
After one year, the fuel prices have sky rocketed. After political changes in Myanmar, the fuel prices were increased. Although fuel oil prices were increased, there were shortages of fuel in fuel stations according to a local of Yangon. The Yangon Region government had carried out surprised checks at the fuel filling stations. And then, they have sent an order dated August 13 to the Yangon Region Supervisory Committee on Petroleum and Petroleum Product Business Activities to take action against suspended or limited sales of fuels at filling stations. However, long queues to buy fuel in some cities.
Is Russian oil an answer?
Chairman of State Administration Council (SAC) and Prime Minister Senior General Min Aung Hlaing said at the SAC meeting held in Nay Pyi Taw on August 16 that the imported fuel from Russia would be arrived by the end of August. He said that the country has sufficient fuel till the end of August.
More oil tankers will arrive here soon. Fuel purchased from Russia will arrive in Myanmar after August. Fuel tankers will arrive here one after another. Prices of fuel are based on market manipulation of merchants. The imported fuel through Singapore will be arriving in Myanmar from Russia in coming months. The Singapore is Myanmar’s neighbouring country. So, transportation fees in Singapore are cheaper compared with the Russia. No one knows the price of imported fuel from Russia would be in the local market.
Nevertheless, the fuel price hike causes an increase in the cost of living. So, it is very important that the fuel prices fall down. Critics say that they are watching whether the imported fuel from Russia would be an answer.
