Burma smuggles or imports fuel despite gas resources: loses money using black market funds
Posted by gasweek on 17 October, 2007
Burma had significant gas resources but it imported all its petrol and diesel, wrote Connie Levett in The Sydney Morning Herald (9/10/2007, p. 9).
Ministry losing money on each transaction: While the military reaped rich profits from selling quotas on the black market, the Ministry of Energy subsidised the price of petrol. It lost money on each transaction because the ministry bought fuel internationally in US dollars but sold in the local currency, the kyat. It used a revolving fund of $US36 million, spending about $US200 million a year. The problem for the ministry was that it could not then use the internationally worthless kyat to buy the next round of fuel, so the ministry was forced to buy US dollars on the black market in Burma at inflated prices.
Fuel smuggled across borders: The redirected army quotas were not enough to supply the black market so fuel was also smuggled in across the Chinese, Indian and Thai borders. “When it is smuggled in by sea, the navy, which has sold its quota, takes drums from the smugglers to clear their way,” the analyst had said.
The Sydney Morning Herald, 9/10/2007, p. 9