Credit: Irrawaddy News Magazine, Wednesday, January 27, 2010.Burmese business tycoon Tay Za, a close associate of the junta generals, has reportedly co-founded an association to control the importation and sale of gasoline and diesel fuel.
An official at the regime-owned Federation of Chambers of Commerce and Industry and Rangoon-based business sources said the Fuel Oil Importers and Distributors Association (FOIDA) was formed on Jan. 23, with Tay Za as chairman and Aung Thet Mann as vice chairman. The association has 138 members.
Aung Thet Mann is the son of the regime's No. 4, Gen. Thura Shwe Mann. Both men are on the US sanctions list.
The Burmese junta's privatization commission announced recently that it is selling more than 100 state-owned buildings and factories as part of the latest wave of privatizations. Petrol stations, which were formerly run by the Ministry of Energy, were not included in the list.
Business sources, however, said that Htoo Trading Co Ltd, owned by Tay Za, has already been awarded a contract to operate state-owned gas stations in Upper Burma.
Sources said that the FOIDA will oversee the operations of importing, pricing and distribution of gasoline and diesel.
According to the Ministry of Energy, Burma has 256 fuel filling stations. The military government has strictly controlled all fuel-related business, including filling stations, since 1962.
Due to the continued increase in global fuel prices in 2008, the Burmese military government has allowed trade by permitting two companies—Union of Myanmar Economic Holding Ltd, a military generals’ syndicate, and Tay Za’s Htoo Trading Company—to import fuel.
In August 2008, the Ministry of Energy allowed petrol stations to sell large quantities of fuel to holders of dollar-denominated foreign exchange certificates (FECs), ending a system of buying fuel with ration books under a restricted quota. Consumers paying in the national currency, kyat, are still limited to two gallons per day.
The sources said the regime's Trade Council, the country’s highest authority in the area of importing and exporting, announced a policy of allowing private companies to import diesel from December, 2009.
The new policy replaced that of the Diesel Import Provisional Committee, which was formed after Cyclone Nargis hit Burma in 2008, to enable some private companies to import diesel to meet urgent demand in storm-hit areas.
Burma is essentially a diesel-powered economy. Buses, trains, trucks and portable generators that exist in nearly every home, factory and shop rely on diesel. According to a Xinhua Chinese news agency report, Burma planned to import more than 30,000 tons of diesel for the first time from Singapore in December.
According to the Ministry of Energy, Burma produces some 80 million gallons of diesel every year for domestic use. Over the last few years, however, the country has had to import about 330 million gallons of diesel every year from Malaysia, Thailand and Singapore.
The Xinhua report also said Burma had imported fuel worth US $600 million over the past few years.
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