Few foreign fuel investments, but more Yangon Petrol stations planned: Chief Minister

The Yangon Region Government will increase efforts to allow more Yangon Petrol Co (YP) fuel stations to open in response to high demand, regional government officials said at its annual press conference last week.

“The public frequently asks us to open more YP petrol stations across Yangon. However, many of these projects have been delayed due to land issues. We will continue our efforts to enable further expansion nationwide,” said U Han Tun, regional minister for Agriculture, Livestock, Forestry and Energy.

Yangon Region Chief Minister U Phyo Min Thein said state land was sold to privately-owned Yangon Petrol Co at bargain levels to set up YP stations. However, YP is expected sell fuel at cheaper prices compared with other petrol stations,The Myanmar Times understands.

There are currently just three YP stations in Yangon, in Thaketa, Dagon Seikkan and North Dagon. The petrol stations are operated by the Yangon Petrol Co under the supervision of the Yangon Region government.

The Yangon Petrol Co is reported to have bought state-owned land from the regional government at K2000 per square foot, which is much lower than the market price. On average, YP petrol prices are around K50-K60 per litre less than other petrol stations.

The Myanmar Times understands that the majority of Yangon Petrol Co’s directors are also on the board of PT Power Co, which operates petrol stations in Myanmar together with Best Oil Co, which is registered in Singapore.

At YP stations on June 6, the price per litre of 92 octane (Ron 92) and 95 cctane fuel was K790 and K870, respectively, while a litre of diesel and premium diesel was K905 and K915, respectively.

At Max petrol stations, in comparison, Ron 92 and Ron 95 fuel was priced at K830 and K905 per litre, respectively, while diesel and premium diesel sold for K925 and K935 per litre, respectively.

Other petrol stations also sell fuel at higher prices than YP. The regional government revealed that it provides land to all petrol-station operators at a fraction of the total land cost in Yangon.

U Phyo Min Thein said this is “to ensure that the operators are able to set fuel prices that are fair for the public and prevent situations where fuel is overpriced”.

However, prices at most petrol stations have been rising. Myanmar imports most of its fuel from Singapore and is therefore susceptible to volatile oil prices and foreign exchange rates.

In Myanmar, petrol prices are especially sensitive to spikes in global oil prices.

“We cannot allow petrol prices to continue rising. Stations selling fuel at high prices should be questioned by the public,” U Phyo Min Thein said.

Last year, officials of the Yangon Region government vowed in parliament that they would lower petrol prices to reduce transportation costs for commuters.

MPs had then questioned the rise in transportation costs and high petrol prices. U Hla Htay, MP from Mingalar Taungnyunt township, pointed out that the regional government should allow petrol to be imported more freely and that foreign investors should be allowed into the market. He said that in Yangon, only a small group of firms operate petrol stations and control petrol prices.

U Phyo Min Thein said at the press conference, that the local system and culture of doing business in the retail fuel industry is not conducive and attractive to foreigners.

Indeed, since the Directorate of Investment and Company Administration opened up the fuel import, distribution and retail market to foreigners in 2017, U Han Tun said few foreign investors have ventured into the industry despite showing interest.

China National Petroleum Corp (CNPC) is so far the first foreign operator to open a petrol station in Myanmar using the Singapore Petroleum Co (SPC) brand, in cooperation with Shwe Taung Energy, which currently operates 15 local stations.

The first SPC station is located in San Chaung township, Yangon. SPC was acquired by CNPC in 2009. The Myanmar Times understands CNPC is aiming to open several other SPC petrol stations in Myanmar. In April, CNPC bought a 35pc stake in Shwe Taung Energy.

Source: Myanmar Times

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