Burmese junta to privatise gas stations

Jan 26, 2010 (DVB), More than 250 petrol stations across Burma are to be sold to private companies in a scheme being overseen by a close ally of the ruling junta chief, a senior government official announced.

The privatisation steps are coming from the newly formed Federation of Chambers of Commerce and Industry (FCCI) and the Fuel Oil Importers and Distributors Association (FOIDA), a Ministry of Energy official told Reuters. The FCCI is headed by Tay Za, who has close ties to senior general Than Shwe and runs the Htoo Group, one of Burma's largest conglomerates.

"Arrangements are under way to transfer over 250 petrol and diesel filling stations across the country to private companies in March," the official said.

The move was however met with skepticism by economist Sean Turnell, from the Sydney-based Burma Economic Watch.

"As an economist I would usually welcome more privatisation in Burma," he said, but expressed concern that Tay Za's role in the scheme might be akin to dressing up a "wolf in wolf's clothing".

In what may be indicative of a 'modernisation' programme to run alongside Burma's much maligned elections later this year, the government also appears to be accepting private bids for a major highway construction between Mandalay and Rangoon.

The 707-kilometer highway will pass through Bago and Meikhtila, and is to be built by seven Burmese companies: Max Myanmar, Shwe Thanlwin Highway, Olympic Highstar, Kanbawza, Asia World, Yuzana Highway and Thawtar Win.

The majority of these companies are owned by either members of the ruling junta or close business associates. Turnell stated that this could be a diffusion of how the world views power in Burma; from a state-centred autocracy to a more diffuse oligarchy, largely to deflect accountability and to appear more progressive to the international community.

The issue of gas price and distribution has long been a political hot potato in Burma; the junta's sudden gas price hike was the key spark for the September 2007 monk-led uprising.

Burma imported refined oil worth $US586.6 million in fiscal year 2008/9, up from $US369.6 million the year before, according to Reuters. It is a situation that Turnell labelled "a missed opportunity"; Burma exports huge quantities of raw petroleum products to neighbouring Thailand, China and India.

The Myanmar Petrochemical Enterprise (MPE) states possession of three refineries with a capacity of 57,000 barrels per day, yet according to the CIA world fact book, Burma imports around 18,250 barrels per day.

Turnell further stated that refining capabilities in the country have been degrading "ever since 1948" through a lack of investment to a position where Burma is missing out on what Turnell calls a "lucrative part of the production chain".

Reporting by Joseph Allchin

Leave a reply