Apr 18, 2011

Drastic increase in petrol prices

GOVERNMENT measures to end profiteering from the sale of state-subsidised fuel have sent the price of black market gasoline, or petrol, soaring.
Since ration books were reintroduced in Yangon on March 10, black market fuel prices have climbed by about K1000 a gallon, a 25 percent increase. The increase beyond Yangon in towns that have few, if any, filling stations was even more pronounced.
The black market price of a gallon (4.55 litres) of gasoline in Yangon on March 31 was K5000, while the black market sellers were paying K4700 a gallon from those who filled their tanks with subsidised fuel before on-selling it.
Most of the nation’s filling stations are located in Yangon and Mandalay, leaving other areas to rely on the black market to supply fuel.
In some locations in Chin and Rakhine states, a gallon was selling for K6000, or more than twice the cost of subsidised fuel in Yangon, which is only K2500. The price was K5800 in Mandalay, K5400 in Nay Pyi Taw and K5500 in Mon State’s Mawlamyine and Meiktila in Mandalay Region.
Black market fuel sellers say the higher prices outside Yangon reflect the cost of transporting the fuel and the limited supply.
“It costs about K6000 to transport a 50-gallon drum of fuel from Yangon to Taungoo and up to K10,000 to Mandalay or Taunggyi,” said one black market salesman in Mingalar Taung Nyunt township.
He said the fall in the supply of gasoline from profiteering drivers in Yangon had driven prices upward.
“Before the ration books were introduced, some hardworking drivers were buying and reselling 24 gallons a day, lining up six times and buying four gallons a time.
“We’d buy in one day then as much fuel as we’ve bought in the last week,” he said.
“We were happy to make a profit of K100 a gallon when we sold fuel to buyers elsewhere in early March because we had so much supply. But we’re getting so little fuel now that we’ve raised our profit margin to K200 a gallon, or at least K10,000 a barrel,” he said.
He added that the approaching Thingyan, or Myanmar New Year, festival from April 13 to 16 was also driving prices upward.
“The sale price will reach hit K5200 by April 4. And I think it will rise to at least K5300 by April 13,” he said, adding that the difficulty of buying fuel and other commodities during the festival would inflate prices.
“Traders in other regions always stock up on everything from early April in anticipation of Thingyan,” said the person.
Another black market shop owner, also in Mingalar Taung Nyunt, confirmed that the rise in prices from K4700 a gallon on March 25 to K5000 a gallon on March 31, was due to higher demand from other regions.
He added that while the amount of fuel he was buying from individual car owners was dwindling, some fuel station owners and managers were selling subsidised fuel directly onto the black market.
For profit-minded motorists, the subsidised fuel still represents an easy way to earn money on the side.
U Sein Win Aung, a 49-year-old sailor, lines up every day at a station in Tarmwe township and buys as much fuel as he can get before selling it to a black market buyer. In the previous three days he had bought a total of 14 gallons – 4 gallons on two days and 6 on another.
“I just keep a gallon to use myself and sell the rest. The station is close to my house and it takes about two hours to line up,” he said.
He admitted that lining up is boring but he does it because he has nothing else to do until his next voyage.
Some car owners leave their vehicles in a queue all night long but U Sein Win Aung said that was too risky.
“There was an accident near our house last week. It happened at about 2am and I think a drunk driver hit a car that was lining up at the station. The driver just drove off afterward,” he added.
Another driver lining up in an 800-metre-long queue outside a station in Tarmwe township said he doubted that the introduction of ration books had done anything to reduce the queues.
He added that it usually took more than two hours to buy 4 gallons of fuel.
“I leave my car near the station at 9pm and make sure I’m back by the time the station opens at 6am. The station’s attendants come and give us numbered tokens.
“One day I remember getting a token that said I was 121st in line and had to wait for hours,” he said.

Source: Myanmar Times