Giant cooking gas price surge shutters stores

Giant cooking gas price surge shutters stores

By Su Phyo Win   |   Sunday, 22 June 2014

The price of liquefied petroleum gas (LPG) nearly quadrupled this month to what some are calling the highest prices ever recorded in Myanmar.

Disruptions of imports along the Thai border are being blamed for the spike, which is forcing businesses to close and households to put off refilling their ubiquitous fuel tanks.

LPG is the preferred fuel for nearly all Myanmar households and restaurants, and had been selling for between K2000 and K2500 per viss (1.6 kilograms) at the start of the month. But shopkeepers on June 20 told The Myanmar Times that LPG is selling for K8500 a viss at present – if it is possible to find supply.

"We've never faced such a price surge," said one clearly exasperated LPG shop owner in Yangon's Tarnwe township. "Gas prices have climbed in the past for a short while, before dropping again. But this time it's gone too high and gone on too long."

Many of his competitors, along with restaurants and small businesses that made heavy use of the fuel, are forced to close until supply returns to normal, he said.

Prior to 2011 the government imported LPG and sold it at a subsidised rate to high-level officials, who resold it on the market. Other imports were made up of LPG smuggled across the border from Thailand and sold on the black market. But from August 2011, the government granted five private companies – Asia World, Universal Energy, Union of Myanmar Economic Holdings Limited, Infinite Benevolence and Myanma Liquefied Petroleum Gas – licences to import and sell LPG as part of the government's ongoing privatisation of the economy.

Despite being rich in natural gas, Myanmar does not have enough facilities to compress the gas into liquid form, and so must import LPG from abroad. Often in recent years these imports have come from Thailand, which has adequate refining capacity, but many are saying spillover from the May 22 coup has slowed LPG trade through the border crossings.

U Than Oo, a shop owner in Kyauktada township, blamed a closed border crossing at Myawaddy to Thailand as the reason for the shortage, while another shop owner in Tarnwe township said the problem will be circumvented through ship-based shipments, with prices expected to drop when the next LPG-carrying boat comes in at the end of the month.

Officials from importing companies declined to discuss the issue with The Myanmar Times, with employees at Universal Energy saying it was not their business to notify the press about the price hike.

Whatever the reason, Yangon people have had to change their cooking habits now that the gas has stopped flowing.

Daw Tin Tin Win, a retired Ministry of Industry official, said she has stopped using gas now that it has breached K8000. "I will use electricity until

prices drop," she said.

While shortages are currently faced, the flow of gas did not stop even during the cyclone Nargis, said U Than Oo.

"It's the highest price I've ever heard of," he said. "We've decided to give businesspeople priority over households, because if we don't support them all the businesses will shut down."

Frequent LPG buyers say they are reeling to cope with the costs.

One restaurant owner said 10 viss of LPG had cost K28,000 at the beginning of June, then K38,000, K45,000, K65,000 and the last order was K85,000.

"We have to raise our food prices or we can't survive," she said.

Shop owners say they are holding out hope prices return to normal at the end of the month.

Myanmar's state-owned Myanma Petrochemical Enterpirse in April announced in state-run media it would accept expressions of interest from foreign investors to operate its Nyaung Don LPG plant as a joint venture.

LPG has advantages and disadvantages compared with other fuels. On one hand it is relatively easy to store and transport, and is cheap and burns cleanly. But improper handling can be both costly and deadly.

Source: http://www.news.myanmaronlinecentre.com/2014/06/23/giant-cooking-gas-price-surge-shutters-stores/