In recent days, Burma has increased its prices of diesel fuel, compressed natural gas (CNG) and petroleum have risen substantially. In the case of CNG, which is touted as an alternative fuel source by the government and used in Rangoon buses, prices have tripled, affecting bus fares. The Irrawaddy, in a series of four articles (1, 2, 3, 4), concludes that the rising gas prices are because of economic mismanagement, stagnating stock markets in the Southeast Asian region, and government shortage of foreign currency. The Irrawaddy also notes that the black market foreign exchange rate has increased, from 1280 kyat per US dollar to 1325 kyat per US dollar. Also, the gold prices have increased in the country, probably the result of greater demand (in Burma, gold or foreign dollars are usually preferred for saving money, because Burmese kyat are not stable.
Rising gasoline prices have already affected workers who depend on public transportation, particularly in Rangoon, where poor laborers from outlying suburbs must take buses to work. This has also impacted local trading, as diesel prices have risen. Even though Burmese oil prices are much lower than in the U.S., partly because oil is subsidized by the government (and rationed, which has fueled a thriving black market for gasoline), these increases are astronomical to many urbanites, in particular.
Akyab and Kyaukphyu, Burmese towns where India and China have their sights set on. (Sorry for the poor quality–I took this photo from an old atlas I have.)
This comes a day after the Burmese government decided to sell two blocks of an offshore gas field to PetroChina instead of India’s two oil companies, which were involved in developing the field. Burma is clever in playing off two potential superpowers, China and India, both of which have ambitions of obtaining access to the largely untapped Burma. The Indian government is planning to invest in restoring the post-colonial port of Akyab (Sittwe), located on the coast of Burma’s Arakan State while China is eying sea access from the landlocked Yunnan Province to the Bay of Bengal, by connecting a land route stretching from Yunnan to Kyaukphyu (Asia World Company and Chinese companies are planning to develop a deep-sea port there), located southwest of Akyab.