Fuel oil price edges up on Kyat depreciation

The prices of fuel oil remained on the upward trend in the domestic market, tracking the Kyat weakening against the US dollar, the market’s data indicated.
On 1 December, the prices stood at K1,250 for Octane 92, K1,300 for Octane 95, K1,230 for diesel and K1,240 for premium diesel, whereas it jumped to K1,340 for Octane 92, K1,390 for Octane 95, K1,315 for diesel and K1,325 for premium diesel. There is a price gap of K85-90 per litre within a month, according to the local fuel oil market.
The fuel oil price is highly correlated with the exchange rate. At present, the exchange rate is pegged at around K1,900 in the local forex market.
When a dollar was valued at only K1,330 in early February, the fuel oil was estimated at K590 per litre for Octane 92, K610 for Octane 95, K590 for diesel and K605 for premium diesel in early February 2021 in the domestic retail market.
Consequently, in a bid to steer the dollar rally in the local forex market, the Central Bank of Myanmar (CBM) sold US$88 million at its auction market rate in December.
Additionally, the Ministry of Commerce in coordination with the Myanmar Petroleum Traders Association carried out a scheme to distribute fuel oil at a fairer rate through the government-sponsored petrol station chains. The total volume of fuel oil that are sold at very cheap rates is equivalent to the amount that the oil importers directly purchased the foreign currency from the CBM.
The CBM has directly sold $53.4 million to the fuel oil sector so far. Normally, Myanmar yearly imports six million tonnes of fuel oil from external markets, the Ministry of Commerce stated. — NN/GNLM