Myanmar can't afford further diesel subsidies

Myanmar’s military government said it was forced to suddenly raise domestic fuel prices in August, because it could not afford the growing cost of fuel subsidies. The doubling of diesel fuel prices and a five-fold hike in the cost of compressed natural gas sparked a rare series of protests against the junta, which has been in charge of the former Burma for the last 45 years. “The new price does not cover what we are paying for our imports,” said Soe Myint, director of the Energy Ministry’s energy planning department. Soe Myint said the increases, which brought the former capital’s bus networks to a standstill, were not as severe as the last adjustment, when the price of state-subsidized, tightly rationed fuel was increased nine times. Myanmar has some of Asia’s largest reserves of natural gas and is already an oil producer, although decades of non-investment in its refineries means it has to import most of its energy requirements. (August 28, 2007)