Myanmar oil imports surge with 8% growth

Yangon’s docks need upgrading. Source: Asean Economist

Myanmar’s oil imports are surging to fuel its fast-growing economy and rebuild decrepit infrastructure, creating a shipping boom. 

With growth potentially exceeding 8 per cent this financial year, small tankers are increasingly bringing gas, oil and diesel from Singapore, Asean’s maritime hub. Yangon’s port can only accept small vessels.

Shipping data suggests that some 20 small tankers with an estimated combined capacity of 220,000 deadweight tonnes are currently shipping refined products into Myanmar, mostly from Singapore: almost double that of last year.

“Everyone is quite bullish about the Myanmar market,” said Lim Han of the Singaporean firm Hong Lam Marine. It started oil shipments to Myanmar six months ago.

Nay Pyi Taw is opening up to investors as it tries to reconstruct roads, factories and airports and boost floundering electricity supplies.

The fuel is mostly used in power generation, construction and transport, especially for heavy goods vehicles: a clear sign of economic growth.

“We forecast refined fuels consumption in Myanmar to increase at an average annual rate of 6 per cent over the next 10 years,” a BMI Research report said.

Although the amount of fuel being shipped into Myanmar is small by international standards, the firms servicing the route enjoy healthy profits.

Traders say that Myanma Petroleum Products Enterprise, the state-run oil firm, usually buys gas oil from buyers in Singapore, such as trading house Trafigura’s subsidiary Puma Energy, at a premium of more than US$3 per barrel above Singapore prices.

Traders say fuel shipments to Myanmar will rise further as Yangon’s port expands.

While the government is encouraging trade and investment, it is more nuanced about shipments providing aid to its embattled Rohingya minority.

An aid flotilla meant to deliver food and other supplies from Malaysia to Myanmar’s troubled Rakhine State has yet to receive permission to enter Myanmar, but organisers said that the vessel would leave without receiving permission.

The shipment, organised by several non-governmental organisations, was due to leave Malaysia on January 10, but it will be postponed towards the end of the month instead.

Organisers said requests for approval on December 12 through the Malaysian Foreign Ministry were denied entry into Myanmar’s waters.

The lead organiser, Putera 1Malaysia Club, told the press at a warehouse in Kuala Lumpur that the ship would dock in Bangladesh if Nay Pyi Taw did not want to cooperate.

“Look at us. We are not terrorists. We are not there to fight with them, we are there to ease their problems,” said Abdul Azeez, who chairs the pro-government NGO. “We are begging to come in to help them on a humanitarian mission.”