Pumps run dry as Myanmar faces yet another fuel shortage

Myanmar is experiencing its third fuel shortage under junta rule, as residents of Yangon, Mandalay, and Naypyitaw report difficulties in purchasing 92 and 95 octane petrol. Since Monday, gas stations in major cities have either been closed or have set limits on fuel purchases. In most cases, the limit is 30,000 to 50,000 kyat per vehicle—enough to buy between 12 and 20 litres—while in some places it is even less. “This morning, I was able to get 20,000 kyat worth of fuel—about 8 litres—after a long wait in line,” said one resident of Naypyitaw, where a number of gas stations have been reported closed. Even a military-owned gas station in front of the Naypyitaw City Development Committee Guest House stopped selling after half a day, another resident of the city told Myanmar Now. In Yangon, the country’s commercial capital, drivers say they can tell from a distance if they are going to have any luck filling up their vehicles. “If the signs are not lit up, that means they’re all out, and you might as well just turn back,” said one taxi driver. The situation appears to be even more dire in Mandalay, where petrol stations operated by major distributors such as Denko, Max, and Asia Energy have suspended sales. “Many larger stations are closed. People are crowding at the ones that remain open. When they do sell, it’s limited to about 3,000 kyat,” a local explained. Some would-be customers said they blamed the latest shortage on recent flooding that has hit much of the country, disrupting deliveries of fuel even to major cities. Others, however, attribute it to the ongoing civil war, which has brought groups opposed to the regime ever closer to large urban centres once relatively insulated from the impact of the conflict. North of Mandalay, resistance groups continue to make advances in Madaya Township, where they have reportedly captured at least 28 junta outposts. Intense clashes just beyond Mandalay’s city limits have prompted many living there to stock up on fuel in case they need to flee, according to residents. People line up to buy fuel at a gas station in Naypyitaw in December 2023 (Supplied) Members of Myanmar’s business community suggested that the latest shortage was likely related to the continuing collapse of the kyat against the US dollar. Earlier this week, the dollar surged past the 5,000-kyat level for the first time, as gold also rose to new highs amid deepening economic uncertainty in the war-wracked country. Previously, fuel importers were able to purchase up to 40 percent of the dollars they needed from the junta-controlled Central Bank of Myanmar at the official rate, which currently stands at just under 3,400 kyat to the dollar. Now, however, they must pay the full market rate, which has reached as high as 5,200 kyat to the dollar in recent trading. But fuel suppliers say that the real issue is that they are not allowed to sell at a price that reflects the high cost of imports. This has prompted many to limit their sales rather than sell at a loss. “The dollar is skyrocketing, and it’s becoming harder to buy. But even at artificially low official rates, fuel traders can’t break even,” said one fuel importer. According to the junta’s market reference prices, a litre of octane 92 petrol now sells for 2,487 kyat, while octane 95 is 2,603 kyat per litre. These prices are slightly lower than what they were at the end of May, when the U.S. dollar was around 4,600 kyat. In mid-July, the Myanmar Petroleum Trade Association requested that the junta’s Petroleum Products Regulatory Department adjust fuel reference prices based on actual dollar rates rather than the artificially low official rate. “With the Central Bank not providing dollars, fuel businesses have stopped selling. Importers want to sell based on the external dollar market rate,” explained an official from a domestic fuel importing company. Fuel shortages have been a recurring issue under the current regime, with similar situations occurring in September 2022 and December 2023. Despite the junta’s claims that it can resolve these problems by purchasing fuel from Russia, shortages persist.

Pumps run dry as Myanmar faces yet another fuel shortage

It is the third time since the military seized power more than three years ago that fuel supplies have fallen far short of consumers’ needs

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