Price surge and shortages at the gas pump fuel fears of worse to come for Myanmar’s economy

Frustration is growing in Myanmar’s largest cities, as fuel pumps run dry and motorists form long lines in the increasingly forlorn hope of gassing up their vehicles. From the commercial capital Yangon to second city Mandalay and junta stronghold Naypyitaw, an energy crisis has hit consumers already reeling under the weight of an economy blighted by conflict and mismanagement. “They ran out while I was queuing up at the gas station. There were also others who went away with their tanks empty. They didn’t say when they would have more to sell,” said one Yangon resident who did not want to be named for security reasons. “We are already facing a variety of hardships, including rising commodity prices and power outages. Now we can’t even use a generator when the lights go out,” he added. Even police have been affected by the shortages. According to a police officer in Yangon, the military authorities have begun allocating rations of petrol and diesel, but only to certain officers, and not enough to cover their daily needs. “The higher your rank, the more fuel you get. Rank-and-file policemen and officers who are not gazetted do not get any rations of fuel. They have to queue up at the gas stations like members of the public,” he said. Meanwhile, in Mandalay, profiteers are already beginning to take advantage of the situation, according to one man. “In times like this, they always emerge,” he said. “They queue up and buy just to resell at outrageous prices. Some are asking 5,000 kyat for a 1-litre bottle,” he said. The steep rise in petrol prices has had an immediate impact on everyone from taxi drivers to factory workers. “Once it gets past 2,500 kyat a litre, we’re going to have to raise our fares. Otherwise, we won’t be able to operate,” said one Yangon taxi driver. “And if it runs out completely, we’ll be in real trouble.” “Ordinary workers don’t have the time to go searching for petrol. And without it, we won’t be able to go to work,” said one woman employed by a factory in Mandalay. Those who need fuel for purposes other than transportation are also out of luck. “I went to get some to operate a machine, but they said they would only sell it to me if I came with my motorcycle. When I did, they still said no. They would only sell if my tank was empty,” said a middle-aged man in Pyin Oo Lwin, about 40 miles east on Mandalay. “I’ve never experienced anything like it,” he added. Even in Naypyitaw, where the junta is headquartered, six gas stations have been closed. At one that is still open, hundreds of cars and motorcycles have queued up to buy 92 octane gas at 2,555 a litre, according to locals. Some gas stations have restricted their sales, either by limiting the hours that they are open or the amount that they will sell to each customer. “If we’re still waiting for the tanker to arrive, we hesitate to sell what we already have,” said the owner of one gas station in Naypyitaw. “Sometimes we open up but still have to turn customers away. It’s an on-and-off situation. If it continues, prices might surge.” With black-market prices already reaching 3,500 a litre, few customers are complaining about the price or quality of what’s on offer at official gas stations. “They don’t ask about the octane level or price, they just want us to fill their tanks with whatever we’ve got,” said one person working at a gas station in Naypyitaw. What most people are worried about is whether fuel will be available at any price in the coming days. For them, the suppliers can offer only the faintest hope. At the MAX gas station near the Bawgathiri bus station east of Naypyitaw, a sign announces the arrival of a tanker truck at Yangon’s Thilawa port, more than 250 miles away. “We will resell the fuel,” the sign says, without specifying when the shipment is expected to reach Naypyitaw. A notice displayed at a gas station in Naypyitaw promises the imminent arrival of a shipment of fuel A sign of desperation Last Friday, Myanmar’s junta raised the reference price for gasoline by more than 300 kyat per litre as it moved to end its policy of allowing oil importers to purchase US dollars at the artificially low official exchange rate of 2,100 to the dollar. This came on Tuesday, when the regime-controlled Central Bank of Myanmar announced that it had abandoned the fixed rate in favour of the market rate of around 3,500 kyat to the dollar. Sean Turnell, an Australian economist who was imprisoned by the regime because of his role as advisor to the civilian government that it ousted in February 2021, described the move as a sign of the junta’s growing desperation. “This is telling us that they’re running out of foreign exchange and they just need to go straight to the market,” he said. “These things typically happen [...] when regimes are really under the hammer.” “This regime’s in real trouble,” he added. In mid-November, junta spokesperson Zaw Min Tun stated that four oil tankers had arrived in the country on November 11 and 12, with 15 more due in the near future. Since then, however, the regime has been silent on when more fuel supplies could be expected to reach Myanmar’s ports. On November 29, junta chief Min Aung Hlaing disclosed that his regime had taken action against eight companies accused of profiting excessively from fuel sales—an early sign, perhaps, that it was losing the battle against market forces at the same time as it was suffering serious military defeats around the country. According to Zaw Min Tun, however, the current energy crisis facing the country is merely temporary. “The impact will be short-lived,” he said in an audio message sent to media outlets on December 6, adding that the regime has more than enough US dollars to buy all the fuel the country needs. Regarding the long queues at gas stations nationwide, the junta attributed them to heightened consumer purchases driven by fears of fuel shortages and price hikes. In a statement issued through state-run newspapers on December 7, the regime said that about 970,000 gallons of 92 octane petrol and 250,000 gallons of 95 octane petrol had been distributed to nearly 3,400 gas stations across the country on December 5. It remains to be seen, however, if the junta’s claims will allay public concerns about the possibility of a protracted crisis and prevent further economic destabilisation. For many, the situation has already seriously shaken what little confidence they had in the regime’s ability to manage an economy severely weakened by nearly three years of civil war. “People have to queue up for cooking oil and petrol now, but if this continues, we might face a famine and even have to queue for boiled rice like in 1988. If they can’t govern the country, they should step aside. The country is spiralling into a state of disaster,” said a Mandalay resident in his 60s, echoing a common sentiment.

Price surge and shortages at the gas pump fuel fears of worse to come for Myanmar’s economy

Hit by a series of military defeats, the junta also appears to be losing its battle to control market forces

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