What’s behind Myanmar’s painful oil and gas price rise?

– Compared to manufacturing and service sectors, which are hampered by inadequate infrastructure and corruption, industries such as oil, gas and mining are the most productive sectors in the country of 53 million people.

– However, Myanmar has to import nearly all of its diesel because its domestic refining sector has been crippled by 50 years of non-investment, analysts say. In 2004 it imported an estimated 19,180 barrels of oil per day.
AUGUST PRICE SPIKE:

– The shock doubling of diesel prices and a five-fold rise in the cost of compressed natural gas on Aug. 15 most likely resulted from the government’s struggle to fund domestic diesel subsidies, analysts say.

– Energy Ministry Director Soe Myint said the increase was not as severe as the last one two years ago, when the price of state-subsidised, tightly rationed fuel increased nine-fold.

STRAINED NATIONAL REVENUES:

– Despite rising revenues from natural gas, other outgoings have strained national revenues.

– These include building a new capital at Naypyidaw in jungle-clad hills 400 km (250 miles) north of Yangon, a five-fold pay-rise for civil servants, a 10-fold increase for the army and bank-rolling the ambitious Yadanabon Silicon Village cyber-city outside Pyin Oo Lwin in the north.

Reuters