Burma Authorities Allow Fuel Purchase with Foreign Exchange Certs
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Monday, 25 August 2008 |
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Burma’s junta authorized the unlimited purchase of diesel and fuel with
Foreign Exchange Certificates (FECs) at state-owned service stations at
the week-end. The move was preceded by an increase in the price of an
FEC.
 The Ministry of Energy sent a memo saying the public could buy diesel and fuel without limitation if they pay with FECs, according to a source in Rangoon. “We received this announcement around midnight yesterday,” said a petroleum sale manager. “But we are still using the previous petrol distribution system.” When using kyat to purchase fuel, each buyer is limited to two gallons per day under a government rationing plan.
Petrol stations in Rangoon sell a gallon of gasoline for 2,500 kyat (US $2.11) and about 3,000 kyat ($2.53) for a gallon of diesel. The new rule prices a gallon of gasoline at 3.75 FEC and a gallon of diesel at 4.25 FEC.
A dollar could buy 950 FEC on Thursday. The price was 1,100 on Friday. A US dollar is equal to 1,205 kyat, according to the currency exchange market in Rangoon.
The growing gap between the value of the US dollar and Burmese FECs has turned the relief effort into a major cash cow for the junta, say currency dealers.
Usually, US dollars are technically equal in value to one FEC. But business sources in Burma say the price of FECs started to fall in the wake of Cyclone Nargis, as the junta decided to allow major international aid donations and Burmese living overseas to transfer large amounts of cash into Myanmar Foreign Trade Bank accounts to support the relief effort.
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