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January 19, 2008

MYANMAR/ENERGY
Fuel import may be liberalized

Myanmar is deliberating on liberalizing the import of fuel by allowing the private sector to undertake the business in a bid to increase production, the local weekly Myanmar Times reported in this week's issue.

Private business organizations are set to seek fuel import through the Trade Council, the country's highest authority in charge of export and import trading businesses, the report said, quoting the Export and Import Supervisory Committee.

"Under the existing procedure, only government affiliated organizations and private companies, including the Union of Myanmar Economic Holding Ltd and Htoo Trading Company, may import fuel directly," it said.

The move will signify the first ever allowance for the private sector to import fuel.

Myanmar mainly imports diesel from Malaysia, Thailand and Singapore, heavily draining on the country's foreign currency reserve, according to the report.

Figures from the Ministry of Energy show that Myanmar produces about 80 million gallons of diesel annually for domestic demand, while importing the fuel worth some 330 million gallons a year over the past few years.

Diesel consumption has tripled in the last decade, while demand for petrol has doubled, the figures also indicate.

The report quoted domestic energy experts as saying that Myanmar imported fuel which worth as much as 600 million dollars last year.

In August 2007, the official prices of fuel in Myanmar were raised for the second time since October 2005 by 66 percent to 2,500 Kyats (about 1.96 U.S. dollars) per gallon for petrol, while those of diesel by 100 percent to 3,000 Kyats (2.36 dollars) per gallon and compressed natural gas (CNG) by over 500 percent to 273Kyats (21 U.S. cents) from 52 Kyats (4 cents) per kilogram or to 3,000 Kyats (2.36 dollars) from 500 Kyats (39 cents) per 50-liter cyclinder.

The market prices of fuel have been quoted as high as 4,600 Kyats per gallon for petrol and 4,800 Kyats for diesel ever since then.

The official fuel prices and its market prices have constantly remained a wide gap ever since in Myanmar.

The government claimed that it has maintained such constant supply of fuel domestically at a heavily subsidized lower prices in the past.

On Jan. 1, the government said that it would maintain the controlled supply of fuel of petrol and diesel to motor vehicles running in the biggest city of Yangon as usual without change, denying the allegation that fuel supply to the consumers will be cut beginning this year.

The controlled quota of fuel supply to private vehicles has remained at 2 gallons per day per car since a few years ago.


Courtesy Xinhua

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