Myanmar Coup Raises Doubts About Fuel Imports

Myanmar soldiers seen inside City Hall in Yangon, Myanmar February 1, 2021 (Source: Reuters / Stringer)

JAKARTA - Myanmar's recovery of fuel imports by the end of 2020 could stall amidst Myanmar's political uncertainty. Previously the military seized power on Monday, February 1.

Myanmar has been a hope for refined fuel in Southeast Asia since increasing imports in December and January to pre-COVID-19 levels. Meanwhile, recent key policies in Indonesia and Malaysia have reduced demand.

However, Myanmar's fuel imports could fall in February 2021 after the government cut communication lines and access to banks following the detention of Aung San Suu Kyi and other leaders of his National League for Democracy (NLD) party.

"Buyers (in Myanmar are already) holding back additional volumes for February ... A little nervous about tensions in the country," said one source.

"Demand has fallen because of COVID-19 and this has exacerbated the problem to some extent."

Oil traders in Myanmar said to buy fuel in February 2021, but trading halted on Monday after the government cut internet and telephone lines while banks were closed, one source with a major trading firm said.

He said the imposition of a potential curfew and concerns the United States imposing sanctions on Myanmar could further disrupt oil demand and trade.

The United States has asked Myanmar's military to respect the recent election results, but has not threatened sanctions. The United States has in the past imposed sanctions on Myanmar and its top military officers for suppression of democratic forces and alleged human rights abuses.

Myanmar's fuel imports rebounded in December and January, returning to pre-COVID-19 levels, after the country lifted the COVID-19 restrictions that were in place for most of the second half of last year, the sources said.

Gasoil imports rose again to around 340,000 tonnes in December, raising the monthly average to 306,000 tonnes for 2020, a 11% increase from the previous year, said one of the sources, who is closely monitoring Myanmar's imports.

Gasoline imports rose to around 184,000 tonnes in December, the source said, bringing the monthly average to 172,000 tonnes for the year, a 7% drop from 2019. Myanmar imports have helped support Asian fuel markets at a time when Indonesian imports are slowing and Malaysian imports are slowing. exporting fuel.

"In the east, there is not much demand," said a source at a large trading firm.