Under the National League for Democracy (NLD) government, Yangon Petrol (YP) fuel stations were granted permission to sell their fuels at cheaper prices than others. Highly-priced land plots in Yangon Region were allotted at prices far lower than the market price.

YP filling stations actually sold fuels at cheap prices when they first opened, but after the political changes in Myanmar, they have been selling their fuels at the same prices as others. What’s more, they are selling some kinds of their fuels in stock at a price that is higher by at least Ks10, compared to other stations.    

On March 15, 2010 when the military government ruled Myanmar, the Privatization Commission invited tenders to privatize the state-owned fuel stations. Then, 155 stations were sold first, 80 second, and 11 third.

Despite the tenders being invited through the state-run newspapers, those fuel stations went into the hands of 20 powerful companies that were close to the government. They had the opportunity to buy the facilities at prices 10 times lower than the market price. These practices are questionable today as the State funds lost billions of kyats.

Criticism emerged that there were losses even though the Privatization Commission called tenders to sell the state-owned fuel stations. It was only in 2019 when similar news emerged that Yangon Petro was permitted to buy state-owned land at an extremely low price of 2,000 kyats per square foot. The company was given land grant and it started opening fuel stations.

When state-owned land plots were sold for such fuel stations at prices far lower than the market price, some were suspicious that about 10 stations could be opened on a plot. It is questionable why such pricey land plots were sold at a price of Ks2, 000 per square foot. According to the investigation made by The Daily Eleven, Yangon Petrol Company applied to the then government for 26 state-owned plots with specific locations and areas at a price of Ks 2,000 per square foot. If the 26 plots were sold at such a price, the State could have lost approximately 200 billion to 300 billion kyats.

Who owns Yangon Petro?  

At the second anniversary of Yangon Region Transport Authority (YRTA), the then Yangon Region chief minister U Phyo Min Thein said: “I would answer the question about any investment made by the Yangon Region government regarding the issue of YP. No, we didn’t invest. Our regional government cannot invest unless the parliament allots money for investment, but we can help the companies that would cooperate with us to reduce fuel prices. We can take measures to facilitate distribution and sales in a more comfortable and easier way. We are trying now. If imported fuels can be sold at a fair price without much profit, we can reduce prices. We must look at the people’s faces. The previous government privatized the state-owned filling stations. Many of the stations were sold at a price of just 10% of the actual value. This means that Ks100 million’s worth of a fuel stations were sold at a price of Ks10 million. But the matter of selling fuels at cheaper prices is still questionable. But these new stations for which we are trying have no privilege to enjoy such rights. Under our new government, such privilege is no way at all. Everyone needs to play fair and square. If they import their fuels and sell them with a fair profit out of honesty and goodwill, there is no reason to have much difference between the global price and domestic price. But now, there is a big difference. They are reluctant to reduce prices again even after commodity prices get lower. Yet they are ready to increase. We have to take measures to ensure checks and balances.”    

He said his government had no investment in Yangon Petro. The previous government sold the state-run fuel stations to the private sector to reduce prices but they increased the prices when they were due and didn’t reduce prices when they were due, the former chief minister pointed out.

However, we should question whether new Yangon Petro fuel stations have been given a special privilege.

The first point is that scrutiny takes at least a year to open a filling station. As such, there was no same process as the YP. At that time, chairperson of Yangon Region Parliament Committee for Finance, Planning and Economy and ex-MP of Yangon Region Daw Sandar Min from Seikkyi-Khanaungto Township Constituency (1) said YP was able to apply for land, and build and open its fuel stations in six months.

Second, state-owned spacious plots were sold at a price of Ks2,000 per square foot in significant and important places. This means a special privilege was given.

According to news reports released in 2019, at Yangon Petro, former sales officer of Yangon Region Fuel Trading U Tin Naing Soe serves as managing director and U Win Swe, U Aung Maw Thein, U Aung Shwe, U Aung Myo Zaw and U Zin Min Aung as directors. U Tin Naing Soe is believed to be a former army officer, who completed DSA intake 10.

What is strange is that apart from U Tin Naing Soe, all the five others are found to be members of the board of directors of PT Power Company. Why did the owners of PT Power and BOC fuel stations accumulate the right to buy state-own land at a price of Ks2,000 per square foot? How they can serve the country and the people is very interesting. It is questionable whether the benefits the State can have is similar to the situation in which 246 state-owned fuel stations were privatized.  

Have the state-owned plots sold at a price of Ks2,000 per square foot been given land grant under private ownership names?

If it is true that Yangon Petro Company applied for 37.709 acres of state-owned land a price of Ks2,000 per square foot for 26 plots, one land space seems to be too spacious for a fuel station to open. 

For the over 37 acres of land, Yangon Petro had to pay an estimated amount of just about Ks33.018 billion to the State. Aside from the market price, if we calculate according to the real estate price norms in the townships of Yangon Region issued by the Internal Revenue Department in 2018, hundreds of billions of kyats could have been lost. 

News emerged that the Urban and Housing Development Department, when U Han Zaw served as Minister for Construction in 2019, handed over 1.647 acres of land located on Shukhinthar circular road in Tharkayta Township to Yangon Petro at a price of Ks2,000 per square foot. The amount the State got for 121,096 square feet of two plots reportedly to be only Ks234.1 million. So it is likely that they were sold at a price of less than Ks2,000 per square foot.

In 2018 the current value assessment committee of the Internal Revenue Department fixed the price of land and property on Shukhinthar Road in Tharkayta Township at Ks65,000 per square foot. According to the enquiry, the location Yangon Petro received is 1.647 acres. It is 71,743 square feet. As the real price could be up to Ks 46.632 billion, the State could have lost Ks 45.198 billion.

It is understood that the Urban and Housing Development Department also sold a plot of 1.133 acres in Dagon Seikkan Township to Yangon Petro for Ks 90.7 million. According to the outside market price, one square foot is about Ks 80,000. For the 1.133 acres, the price could be Ks39.482 billion.

Since the department under the Ministry of Construction sold these two plots to Yangon Petro Company at prices far lower than the market price, the State could have lost billions of kyats. It is questionable what the State can get back. Additionally, it is reported that the two plots have turned from the State ownership to the company ownership name. 

The proposed budget of K3.3018 billion for more than 37 acres of 26 plots of land is even lower than the current market value of two plots of land owned by the government. The loss of the national budget is enormous.

In 2019, Daw Sandar Min, MP of No. 1 Seikkyi Kanaungto Constituency for the Yangon Region and Head of the Finance, Planning and Economic Committee for  the Yangon Region Hluttaw, said, “If the state-owned land plots are available in 26 places, it will be a good plan to sell fuel to the people at a reduced price. If there is a plan to make it available to the people, it must be announced even if it is not a tender. It is not natural for the five plots of land to be allotted with just two names.”

What will the country get back?

On January 25, 2019, U Myo Yan Naung Thein, secretary of the NLD Central Research Group, wrote a post on his social media account about Yangon Petro, “Is Yangon Petro now lowering fuel prices for the benefit of the people? Cronies will not like it. The tender was not called for the land plots in YP case. It is not a matter of doing it with government money. Government land is not being used for nothing. Not even for a special grant price of K900 per square feet, but for K2,000 per square feet. It's a joint venture with the Yangon Region government, so it provides Government to Government, but Business to Business when it works. The main reason for cooperation with the Yangon Region government is to reduce fuel prices. A total of 20 per cent of profits must be paid to the government. Providing wrong information is the practice of defaming and misleading the public. Consider for the people.”

According to U Myo Yan Naung Thein, Yangon Petro gets state-owned land for K2,000 per square feet. The main thing is to lower the fuel prices. It is a joint venture with the Yangon Region government. It means that 20 per cent of the profits will be paid to the government.

The question here is the loss of hundreds of billions of kyats due to the sale of state-owned land at a very low price. According to The Daily Eleven, if state-owned land is allowed to be acquired at around K3.3018 billion, it will be one per cent or two per cent of the market price. The Yangon Petro fuel station is sometimes underperforming the private sector to reduce the price of fuel, which is now a little more expensive than other fuel stations that have paid the country billions of kyats in taxes. Under the current competition law, who is responsible for lowering the fuel prices, whether it is unfair competition or not, if the private sector does not comply with the rules of privatization, who will be responsible for the country's losses. There have been questions about who will be held accountable. In addition, in the next five years and ten years, there will be questions about who would be responsible for Yangon Petro, like the other 20 companies that previously took over state-owned fuel stations, in a condition that if the price of oil in global market goes up immediately, the fuel stations increase the fuel prices immediately and if the price of oil in global market goes down, they didn’t reduce the price immediately.

The transfer of hundreds of billions worth of state-owned land to Yangon Petro was not debated in the Union Parliament at the time, nor was it debated in the Yangon Regional Parliament. On the other hand, lawmakers have voiced their dissatisfaction with the procedure. Guarantee of why fuel prices will go down and Guarantee of how much gasoline will be sold at a lower price and for how long are the questions people want to know. If hundreds of billions of kyats are lost from the sale of state-owned land without clarification and warranty, it is necessary to reconsider whether it is in line with legal procedures for the loss.

Are the fuel prices in YP cheaper when fuel prices are rising?

The permission to operate YP fuel stations was intended to sell gasoline to the public at a lower price, but at present some fuel prices selling at the YP fuel stations are higher than other fuel stations.

For example, the price of petrol on March 5 was Ks1,930 per litre for 92 Ron, Ks1,995 per litre for 95 Ron, Ks2,035 per litre for premium diesel and Ks2,025 per litre for diesel at Denko and Max fuel stations.

However, YP sold K2,010 per litre for 95 Ron. It is Ks15 more in compared with other fuel stations. The prices of other fuel are no less than those of some fuel stations.

“In the past, YP was cheaper than other fuel stations. But now the price is not cheaper than other fuel stations. I used to fill up my car in YP, but now I filled up my cars in other nearest fuel stations,” said a taxi driver from Yangon.

YP petrol stations have been granted land at cheaper rates than ever before in an effort to curb monopolies in the petrol market and to control the fuel prices. But for now, the price at YP petrol station is not cheaper than other fuel stations. Other fuel stations are leasing land at current prices, but YP, which was allowed to rent at a lower price, now has the same price as other fuel stations.

Action of the Anti-Corruption Commission to be questioned

Under the NLD government, Yangon Region Chief Minister U Phyo Min Thein had been criticized for granting land plots for YP fuel stations to operate at lower prices, which has hurt the state budget.

Despite the criticism, no one has taken seriously the allowance of the operation of YP petrol stations. At the moment, however, those who have been licensed to operate YP petrol stations have been allowed to rent land at a lower price and are now selling petrol at the same price as other petrol stations.

Following the political upheaval in Myanmar, the State Administration Council has filed a lawsuit against former cabinet members under anti-corruption laws.

Former State Counsellor Daw Aung San Suu Kyi has been charged with more than a dozen lawsuits, including Anti-corruption Law, Disaster Management Law and Myanmar Government Secrets Act. Similarly, former President U Win Myint has been charged under Anti-corruption Law by Anti-corruption Commission and with misconduct for the abuse of influence on the Election Commission.

Daw Aung San Suu Kyi has been charged under the Anti-Corruption Law for accepting gold bars and dollars from former Yangon Chief Minister U Phyo Min Thein, while U Win Myint has been charged under the Anti-Corruption Law for buying a helicopter purchased by the Ministry of Social Welfare, Relief and Resettlement.

It is unclear who is currently in charge of YP fuel stations, why the aim of controlling the price of fuel is has not being implemented, and whether former Yangon Region Chief Minister U Phyo Min Thein acted fairly in allocating land.

Former Yangon Region Chief Minister U Phyo Min Thein had called for lower prices for fuel and the control of fuel prices while the price of petrol in Myanmar was rising at a time when the global fuel prices were falling to allocate land for the petrol stations. He said it was possible to control the situation, but at the moment, the price of fuel at YP fuel stations is undeniably the same as other fuel stations, and some prices are higher.

Currently, the rising fuel prices caused by the Russia-Ukraine crisis are making great impact on the grassroots. Rising transportation costs are one of the main reasons for rising commodity prices, and it is also a time of great impact for the grassroots.

On the other hand, investigations into the leasing of land to YP petrol stations, which have caused billions of kyats in losses of state funds and have been criticized as costly to the state budget, have been muted. There have been no reports that the Anti-Corruption Commission, which is investigating former government members and prosecuting them under the Anti-Corruption Law, is investigating the incident. The process of allocating land to YP petrol stations, which is part of a huge loss to the national budget, is also a real disaster. The case has been quiet so far, raising questions for the Anti-Corruption Commission.