Gas Week

EWN Publishing

Burma riots sparked by skyrocketing fuel prices, as govt overstates growth, oil/gas deals

Posted by gasweek on 5 October, 2007

Experts said the Burma Government’s mistake was raising fuel prices overnight on 15 August without first publicly explaining the increase or considering a phased-in price rise, as other Asian countries have done, wrote Aye Win in The Advertiser (29/9/2007, p.70).

Draconian policies: A similar misstep sparked the 1988 protests which the junta suppressed by killing thousands of demonstrators, just after the government increased the price of rice and voided the kyat currency, which left many with worthless money. “It is a policy that has been applied overnight in a draconian manner,” the United Nations humanitarian chief in Burma, Charles Petrie, said. “(The protests) are a popular expression of discontent because people do not have the cash reserves to absorb the shock.”

Fuel prices skyrocket: The government, which held a monopoly on fuel sales and subsidises them, raised prices of fuel from 29c to 58c a litre for diesel fuel. Natural gas also increased as much as 500 per cent. With fuel price increases, the cost of such commodities as eggs, cooking oil and poultry have risen by an average of 35 per cent. The government defended the price increases as necessary to free-up funds for social programs. Many were walking kilometres to work to avoid paying higher bus fares. Others have begun selling furniture and household goods.

Overstating economic growth: “There are a lot of people who think they have nothing to lose,” Turnell said. On paper, the difficult economic conditions did not seem to gel with the upbeat government predictions of double-digit growth and announcements of oil and gas deals with Chinese, Thai and South Korean companies. Turnell and other Burma experts said the government overstated its economic growth and most of the oil and gas deals, worth an estimated $2.27 billion, were years from producing significant revenue.

The Advertiser, 29/9/2007, p. 70

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