Myanmar fuel imports plunge in Feb as protests disrupt trade

[YANGON] Myanmar's fuel importers have switched to other forms of payment, such as telegraphic transfers, after protests against a military coup disrupted trade, driving February imports to their lowest in more than 3 years, two industry sources said.

A civil disobedience movement has crippled government business, unleashing strikes at banks, factories and shops since the army ousted Aung San Suu Kyi's elected government in a coup on Feb 1.

Now importers are paying in full upfront for fuel cargoes, using telegraphic transfers from local banks to foreign ones as suppliers are no longer accepting letters of credit, the sources, who have knowledge of the matter, said on Wednesday.

They declined to be identified because the subject is sensitive.

"It is getting very difficult to import fuel," said one of them, a company official who is based in Myanmar, which relies heavily on gasoline and diesel imports as its refineries are too small and too old to meet its fuel needs.

"There is a shortage of USD in the market, banks are closed, and our letters of credit are not accepted anymore. The suppliers are rejecting."

Myanmar's political and economic instability complicate the importers' access to credit and government functions required to clear trades, while currency depreciation and rising global oil prices have pushed up domestic prices.

Importers have to place a 10 per cent deposit when the deal is confirmed and pay in full before the cargo is discharged in Yangon, the source added.

"The perceived risk of non-payment is too high." Fuel is still being imported into Myanmar while import terminals are open, the second source said.

Myanmar's imports of gasoline and diesel fell to about 287,000 tonnes in February, the lowest since August 2017, industry data showed, however.

February diesel imports plunged 63 per cent from January while gasoline imports fell nearly 40 per cent.

The kyat currency has lost about 4 per cent against the dollar since the start of February, Refinitiv data showed, and domestic gasoline and diesel prices have risen by 36 per cent to 37 per cent since the end of January.

REUTERS