Myanmar junta to reinstate fuel rationing, petrol station owners say

Businessmen in the fuel sector claimed this week that Myanmar’s military council intends to reintroduce a quota-based system for allocating petrol and diesel that has not been used since the previous military regime. Whereas the older system required consumers to present a ration book at the filling station before making purchases, the new system would make use of a so-called “smart card” to ensure they would not buy more than the allowed maximum. The junta-controlled ministry of energy has reportedly made plans to collaborate with the regime’s Supervisory Committee on Fuel Oil Import, Storage and Distribution and the Myanmar Petroleum Trade Association (MPTA) to implement the system. In the initial phase, smart cards will be issued for the drivers of taxis and commercial transport vehicles, a fuel business owner said. “The price of motor fuel at licensed filling stations is half that of the outside market,” the businessman added. “Consequently, some taxi drivers queue up to buy fuel at the lower price, then resell it at a profit on the outside market. I’ve heard they intend to tackle this issue.” A taxi driver from Yangon said that filling stations only sell about 10 or 15 litres of fuel per customer, which is too little to allow it to reach the black market. “They only sell about 30,000 to 50,000 kyat [US $14 to $24] worth of fuel at the filling stations. It’s not even enough for personal use. How could we resell it?” he said. The military regimes led by former dictators Gen. Ne Win and Sen-Gen Than Shwe issued ration books to vehicle owners, only allowing them to purchase fuel according to a quota system. The system remained in effect until early 2012, when the transitional administration under Thein Sein did away with it and allowed for the free purchase of automotive fuel. Fuel shortages have been a frequent occurrence under the current military regime. The last severe shortage began in August and lasted more than two weeks. The queues of vehicles outside filling stations became so long that customers said they were forced to sleep in their cars and on their motorbikes to get sufficient rest for the day. Currently, some filling stations in Yangon, Mandalay, and Naypyitaw can only sell fuel in limited quantities. According to the junta council’s price index on September 3, one litre of gasoline sells for 3,100 kyat (US $1.48) in Yangon, 3,185 kyat (US $1.52) in Mandalay, and 3,160 kyat (US $1.51) in Naypyitaw. In comparison, the black market prices for a litre of gasoline in the same cities ranged between 6,000 and 7,000 kyat (US $2.86 and $3.34). Before the military coup in January 2021, a litre of fuel cost around 600 to 700 kyat. A fuel importer and distributor told Myanmar Now that the main cause of the current fuel shortage is the junta’s tight control over American dollars and its enforcement of a fixed price index that compels fuel business owners to sell at a loss. The emergence of a black market for fuel was due to the junta’s price controls, he said. “People turn to illegal practices because they are losing money. Some small shops advertise one price but charge a different amount,” he added. The regime-controlled Central Bank of Myanmar announced last month that it would release $100 million into the fuel oil sector to ease the scarcity, but did not make clear whether this value was based on the regime’s official exchange rate of 2,100 kyat to the dollar or a quantity closer to the real market value of around 6,000 kyat. The injection of American dollars somewhat alleviated the shortage in major cities like Yangon, Mandalay, and Naypyitaw.

Myanmar junta to reinstate fuel rationing, petrol station owners say

The current junta reportedly plans to revive a rationing system introduced under the previous military dictatorship, replacing the ration books used under the old rules with an approved electronic card to limit diesel and petrol purchases

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