Petrol prices straining consumers in Burma


New Delhi (Mizzima) – The price of petrol on the Burmese black market in Mandalay shot up from 3,300 kyat to 4,800 kyat (890 kyat to $1 US) per gallon this week, according to private fuel station owners.


At the same time, a price hike on the black market has prompted vehicles to queue in at private petrol stations where prices are fixed by authorities. Residents say some station owners routinely sell a portion of their petrol to operators on the illegal market.

In the past, a car owner could buy petrol from private stations in quantities of at most 10 gallons per a week at a price of 2,500 kyat. But, we could buy only six gallons this week’, one car owner told Mizzima. ‘If the private petrol stations sell the petrol on the illegal market, they can get at least 4,300 kyat, so they don’t want to sell the petrol at fixed prices on the legal market’.

“I saw on queue, about 3 kilometres long, outside one private station’ he said.

The petrol price on the illegal market in Mandalay on Tuesday was 4,800 kyat for diesel and 3,600 kyat for high octane fuel. The fixed diesel price was 4,200 kyat and 2,500 kyat.

‘The state energy enterprise sells petrol to the private fuel stations at a price of 2,350 kyat per gallon. Then, the private fuel station sells the petrol back to the end users at a price of 2,500 kyat. But, many stations set aside half their quota to sell it on the illegal market at a higher price’, a petrol trader on Thaikpan Road told Mizzima.

The price of crude oil on the world market has risen as a result of the political unrest in the Middle East and that has prompted the hike in fuel prices in Burma.

After fuel stations were privatized last June, private fuel stations operators have been negotiating with each other to fix prices, say observers.

The diesel price fixed by the authorities in Rangoon is 4,000 kyat while the fixed diesel price in Mandalay is 4,200 kyat, a higher price than in Rangoon because of transportation costs, according to a fuel distributor.

In August 2007, a 500 percent hike in fuel prices and subsequent increases in other commodity prices led to demonstrations in Rangoon and political instability.

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