August 26, 2016

Efforts to be made to abate discrepancy gap of domestic fuel prices

Vehicles line up for fuel at Myanmar International Terminals Thilawa (MITT) outside Yangon.
Vehicles line up for fuel at Myanmar International Terminals Thilawa (MITT) outside Yangon.

In a bid to abate the discrepancy gap of fuel prices in Myanmar, negotiations will reportedly be held with fuel stations which sell their fuel for more than stipulated prices, according to the Myanmar Fuel Entrepreneurs Association (MFEA).
“When global fuel prices appreciate, the price of fuel domestically tends to follow-suit. But, there are fuel stations who keep their high prices even when global fuel prices have fallen. It’s such fuel station owners who keep selling fuel at highly inflated prices with whom negotiations will be held. We’ll encourage, and suggest [they lower their prices],” said Dr Win Myint, secretary of the MFEA.
Fuel sold domestically which is imported from abroad is traded through a dual market: a wholesale market of fuel bought from docked oil tankers, and a retail market of fuel sold at refilling stations.
The fuel markets in mid-August have seen the global price of fuel appreciate, but domestic fuel prices have reportedly yet to increase.
“Discrepancies between wholesale and retail fuel prices could be abated with a weekly pricing update system employed by wholesalers and retailers. We would then monitor to assess whether fuel dealers were adhering to the suitable price or not,” said Daw Mu Mu Shein, a representative of the Fuel Price Control Committee.
Back in 2014, independent fuel dealers were granted permission to import fuel from abroad, with that initial year seeing fuel imported into Myanmar by tankers with capacities to hold 5,000 tons of fuel.
However, this year has seen the size of tankers docking at the country’s ports increase to those with a capacity of 15,000 tons of fuel, allowing for a vast reduction in importation expenses by about US$4.5 million a month.


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