September 06, 2022
Fuel prices remained constant on the high side, according to the fuel oil market. The prices slipped at the end of August. Then, the price stayed stable on the high side between 3 and 5 September.
The prevailing fuel prices stood at K2,395 per litre for Octane 92, K2,495 for Octane 95, K3,125 for premium diesel and K3,040 for diesel.
Kyat depreciation against the US dollar is a contributing factor to the price rise.
The Central Bank of Myanmar set the reference exchange rate for a dollar at K2,100, whereas the exchange rate against the US dollar hit around K3,500 in the grey market.
The Supervisory Committee on Oil Import, Storage and Distribution of Fuel Oil stated that domestic fuel prices are following the price index set by Mean of Platts Singapore (MOPS), the pricing basis for many refined products in southeast Asia.
The committee is governing the fuel oil storage and distribution sector effectively not to have a shortage of oil in the domestic market and ensuring price stability for energy consumers.
The Petroleum Products Regulatory Department, under the guidance of the committee, is issuing the daily reference rate for oil to offer a reasonable price to energy consumers. The reference rate in Yangon Region is set on the MOPS’ price assessment, shipping cost, premium insurance, tax, other general cost and reasonable profit per cent.
The rates for regions and states other than Yangon are evaluated after adding the transport costs and the retail reference rates daily cover on the state-run newspapers and are posted on the media and official website and Facebook page of the department daily starting from 4 May.
As per the statement, 90 per cent of fuel oil in Myanmar is imported, while the remaining 10 per cent is produced locally. The domestic fuel price is highly correlated with international prices. The State is steering the market to mitigate the loss between importers, sellers and energy consumers.
Consequently, the government is trying to distribute the oil at a reasonable price compared to those of regional countries. Some countries levied higher tax rates and hiked oil prices than Myanmar. However, Malaysia’s oil sector receives government subsidies and the prices are about 60 per cent cheaper than that of Myanmar. Every country lays down different patterns of policy to fix the oil prices. Myanmar also poses only a lower tax rate on fuel oil and strives for energy consumers to buy the oil at a cheaper rate. — NN/GNLM