The government will halt domestic petrol production and distribution when its Thanlyin refinery in Yangon Region undergoes renovation, state-run Myanmar Petroleum Product Enterprise announced on July 18.
Prices at the pump, however, are not expected to rise because most motorists buy imported fuel that is a higher quality than the petrol produced at the government’s main refinery, fuel station managers said.
MPPE said the Ministry of Energy is preparing for a joint-venture operation that will boost the plant’s petrol refining capacity.
“The private sector will have to entirely rely on imported petrol when production at the Thanlyin refinery stops for renovation,” the announcement said. It did not provide a timeframe, however.
The government privatised MPPE’s network of fuel filling stations in 2010 and also allowed the private import and distribution of fuel. Since then, the number of filling stations has mushroomed to more than 900 nationwide.
The manager of a filling station in Mandalay said he doubted that the halt in domestic petrol production would have much of an impact on motorists.
“Most people buy higher octane fuel, which is imported,” he said, adding that he did not expect petrol prices to rise.
The difference in price between locally refined petrol and imported 92 RON fuel was only K20 a gallon (4.55 litres) on July 19, he said, adding that domestically produced petrol was selling for K4290.43 a gallon, compared with K4311.06 for 92 RON.
MPPE sells domestically produced fuel to filling stations at K3350 a gallon. Domestic petrol production averages 10 million gallons a month and MPPE distributes 8.8 million gallons to private stations.
A Myanmar Petroleum Association official who asked not to be named said he did not expect any impact from the refinery’s renovation because more fuel will be imported to compensate for the drop in production. “MPPE’s role has been significantly reduced since its fuel-distribution network was privatised,” he added.
The energy ministry announced on July 9 a tender for environmental and social impact assessments for a new refinery in central Myanmar. The refinery will have a capacity of at least 20,000 barrels a day (BPD) and will be built in Magwe Region’s Minhla township.
It will refine crude oil from the Myanmar-China pipeline.
MPPE operates three refineries that have a combined capacity of 51,000BPD.
However, the refineries are old and no longer operate at capacity, according to the “New Energy Architecture Report”, released by the Asian Development Bank in June.
On average they operate at only 41 percent of their stated capacity, the report said.
source: mm times