Fri 21 Oct 2005
Filed under: Inside Burma,News
Yangon: Merchants and consumers both struggled Friday to cope with rising prices of goods and services in the wake of the military government’s surprise nine-fold increase in the price of gasoline.
The fuel price hike, which took effect Thursday, was an evident effort to cut government losses on its subsidy of gasoline and curb black market sales of supplies allocated at the subsidized price. The government holds a monopoly on the distribution of fuel.
Prices of consumer goods had already been creeping up as a recent fall to historic lows in the value of the kyat currency spurred inflation because of increased purchases on fears that the value would fall further.
Since the fuel price increase, transport costs have doubled in some cases, and food prices have also gone up as a result, though not at as high a rate.
A bag of middle-quality rice which was about US$8 ([euro]6.66) last week is now US$8.50 ([euro]7) Thursday and a viss (1.6 kilo, or 3.52 pounds) of onion which cost the equivalent of US$0.33 ([euro]0.27) last week is now US$0.42 ([euro]0.35). Grocery store owners predict that prices would continue to increase as cost of transportation goes up.
Myanmar faces constant fuel shortages due to limited domestic oil production and tight foreign exchange reserves. It has had a rationing system in the capital since 1980, allowing car owners to purchase 60 gallons (228 liters) per month. Vehicle owners who do not use their full quota often sell the excess to black-market vendors, who in turn sell it to other drivers.
The increase in the price of gasoline to 1,500 kyats (US$1.25, [euro]1) a gallon from 180 kyats (US$0.15, [euro]0.13) was announced Wednesday in notices posted at gas stations but not in the media. Aside from keeping pace with high world oil prices, the move appears to be an effort to curb the black market by forcing prices too high for resale.
The move, however, also affects ordinary purchasers who don’t resell their gasoline. After the announcement, armed police, auxiliary fire brigade and ward authorities manned gas stations to prevent possible violence by motorists upset by the hike.
“If the government intends to thwart a handful of black marketeers by raising the fuel price, it is a failure. It hasn’t brought down the black market fuel price but citizens suffer under reeling prices,” said schoolteacher Win Maung, whose monthly salary is about 10,000 kyats (US$8.30, [euro]6.94).
Taxi fares have doubled, bus fare are two to four times higher, and even trips by bicycle-powered trishaws have become more expensive, with a short trip that used to cost 100 kyats (US$0.08, [euro]0.07) now costing 150 kyats (US$0.13, [euro]0.11).
“I have to charge more because food prices go up and I have to feed my family,” trishaw driver Than Hla explained.
Bus commuters who paid 20 kyats (US$0.02, [euro]0.02) for a trip now pay 40-80 kyats (US$0.04-0.08, [euro]0.03-0.07), depending on distance, as bus drivers and operators said they have to increase bus fares to meet the exorbitant fuel price.
A taxi ride of about five kilometers (three miles) which used to cost 1,000 kyats (US$0.83, [euro]0.69) now cost 2,000 kyats (US$1.66, [euro]1.38).