Drone attacks in Saudi may affect local fuel prices

Saudi drone attacks impact on local fuel prices

Industry experts are predicting that the recent spike in global fuel prices results in higher petroleum product prices. It is expected that it will make Myanmar fuel imports more expensive. Myanmar imports diesel and petrol from Singapore and there are also imports from Thailand and China at the border.

Global oil prices rose 20 percent in the wake of the weekend’s attack on a Saudi Arabian oil facility. The attack has removed 5 percent of global supplies. The estimated value of lost production is about 5.7 million barrels a day. Based on reports, experts expect that significant volumes could come back on stream within days. However, it could take weeks to restore full capacity.

U Win Myint, secretary of Myanmar Petroleum Trade Association, said that “if global oil prices stabilise, then local prices will be stable as well. But if prices remain high the local prices will be high.” He added that local fuel prices are regularly subject to global price shifts.

The local oil price also depends on the stability of the exchange rate of the Myanmar Kyat. If the Kyat is weak, import prices will be high.

According to the Ministry of Commerce (MOC), fuel imports have actually decreased so far in fiscal year 2018-19. Diesel imports fell by a value of USD 379 million and petrol fell by USD 5 million.

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