The government is working to deal with rising fuel oil prices as it increased transportation costs and has an impact on commodity prices, said Zaw Htay, Spokesperson of Myanmar President’s Office, at a press conference held in the President House in Nay Pyi Taw on October 5.
“Transportation costs have increased by 10 per cent due to the rising fuel oil prices. An increase in the transportation cost has a direct impact on the commodity prices. Fuel oil entrepreneurs have to import fuel oil worth US$ 400 million every month. The greenback appreciation is one of the reasons for the rising fuel oil prices,” he continued.
Entrepreneurs have to import fuel oils in dollar and resell them in local currency. This factor also has an impact on the fuel oil prices.
The government used to control imports and distribution of fuel oils under the 1934 Petroleum Law. After 2010, the government allowed private companies to import and distribute fuel oils.
“In 2011, the government started allowing local entrepreneurs to import and sell fuel oils. But foreign companies are not allowed to 100 per cent investments in the local fuel markets. They can make a joint venture with the Ministry of Energy. In the time of the-then government, Puma Energy imported jet fuel in cooperation with the Ministry of Energy. In addition, the Ministry of Energy imported and distributed fuel oil, in partnership with a local company. But the wholesale system only was allowed, he added.
Myanmar Investment Commission allowed foreign companies to make a 100-per-cent investment in the fuel oil sector starting April 10, 2017. Foreign top energy companies discussed their difficulties on the ground. But they have not made investments yet. The government is discussing with the ministry about seeking the best way to tackle the problem,” he continued.
