NAYPYITAW—The government cannot control the fuel oil price, which is determined by market forces and the law of supply and demand, Ministry of Electricity and Energy managing director U Thant Sin said.

At a press conference on Thursday, the managing director said fuel oil prices were unlikely to come down any time soon due to the kyat’s decline against the Singapore dollar and other currencies.

“We can’t bring down fuel oil prices in the international market. Similarly, we can’t control domestic market prices, which fluctuate based on the [kyat-dollar] exchange rate and market prices in Singapore,” U Thant Sin said.

“But we are always monitoring the market to make sure that the prices of imported fuel oil are fair,” he added.

The kyat has slumped steeply against the dollar over the past four months, from 1,346 kyats per dollar on June 11 to 1,585 kyats per dollar on Friday. The kyat has also weakened against the Singapore dollar. The market rate was 1,148 kyats to the Singapore dollar on Friday.

Earlier this month, the Myanmar Fuel Oil Importers and Distributors Association said fuel oil prices would remain high due to price increases in Singapore, a key source of Myanmar’s fuel imports.

“We will freeze the price if the selling price in the market is unreasonably high. We have the authority to do so. But, as we’ve built a free market economy, we have to be careful with price restrictions,” said U Thant Sin.

The ministry has intervened in the market twice before, in December 2017 and April 2018, following price spikes.

Fuel oil prices have increased by around 300 kyats per liter over the past three months, with prices varying from place to place depending on transportation costs.

“The government can’t handle this; it can’t exert influence on fuel oil importers,” said U Kyaw Thura, a resident of Pyinmana Township.

“The government should intervene, for example by selling reserve fuel oil or by inviting foreign investment in fuel oil distribution, so that the market is not monopolized,” he added.

The Myanmar Investment Commission relaxed regulations last year and allowed 100-percent-foreign-owned companies to invest in local fuel oil distribution. Since then a few foreign companies have inquired about the possibility, but none has made an official proposal.

“[U.S.-based] Shell Oil Company approached us recently. We asked why they hadn’t yet come [to invest in Myanmar]. They said they are still examining the feasibility [of such a move],” U Thant Sin said.

The ministry is also considering establishing joint ventures with foreign companies to supply fuel oil in Myanmar, he said.

In response to the fuel oil price increase in the domestic market, the Ministry of Electricity and Energy has sold domestically produced petroleum, but this is only suitable for use in motorbikes.

Since April, the ministry has sold 15 million gallons of domestically produced petroleum.

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