Domestic consumers face mounting fuel oil price

Global fuel oil prices reached a peak in three years, hiking the fuel oil prices in the domestic market, said Dr Win Myint of the Myanmar Fuel Oil Importers and Distributors Association.

“Myanmar’s fuel oil price is positively related to the global crude oil market and the dollar exchange rate. Global crude oil prices have increased on account of a significant drop in America’s oil storage facilities and a threatened strike in Nigeria. The price has registered a three-year record high,” he said.

According to the global market price, the brent crude oil price per barrel was worth US$66.87 on 2 January. The price reached the highest of $70.53 on 25 January, and it dropped to $68.58 on 3 February. The retail price of Mandalay’s fuel oil was Ks890 per litre of 92 Octane, Ks940 for 95 Octane, Ks890 for diesel and Ks950 for premium diesel on 3 February.

“According to existing policies, local petrol stations are not allowed to store more than the prescribed limit. The price may change with the stock,” Dr Win Myint maintained.

The Organisation of Petroleum Exporting Countries (OPEC) and other petrol oil producers met in November 2017, with a view to control the global petrol price. They decided to reduce the production rate, leading to a rise in the price.

“A decrease in the wholesale price will not have an immediate effect on the retail price,” said a retailer.

The Thilawa Port stores some 12,000 tonnes of fuel oil to be distributed in the domestic market. It is difficult to handle the imported oil because of the storage limit, resulting in chaos in the local fuel oil market.

The top oil-producing countries are Russia, Saudi Arabia and the United States. Saudi Arabia is planning to scale up the price to 80 per cent in its domestic market. OPEC is also trying to increase the price, which has a strong impact on the global crude oil market.

Khine Hset Wai                                            

Photo: REUTERS