Gas Hike Doesn’t Slow SPDC’s Exports

While much of Burma reels under a sharp rise in fuel prices, an announcement on Monday that the country’s ruling junta will increase exports of natural gas and bio-diesel has left some Burmese analysts perplexed.

“The [Burmese] government should think carefully about how to solve the domestic oil crisis before they address exports of oil and natural gas to foreign countries,” Zaw Oo, a Burmese economist based in the US, told The Irrawaddy on Tuesday.

The plan includes an increase in bio-fuel exports, while the department of energy planning expects to reach 7 million acres (2.8 million hectares) of jatropha plantations in Burma by this time next year.

“Burma’s requirements for biodiesel are minimal, but the jatropha project should earn some foreign exchange income,” Soe Myint, the director-general of the energy planning department, was quoted as saying by the Reuters News Agency on Tuesday.

The jatropha plantations will be managed by seven state departments rather than the central government, with each state having its own processing plants, Soe Myint said.

“It is too early for a poor country like Burma to commit to exporting biofuel when the world market for it remains small,” economist Zaw Oo said.

The junta also plans to step up sales of natural gas and oil with a view to increasing exploration and exports in 2008.

In the fiscal year 2006-7, revenue from gas and oil exports alone accounted for US $2.16 billion of Burma’s total exports, according to Customs Department statistics reported in The Myanmar Times, a Rangoon-based weekly newspaper.

A sharp spike in fuel and commodity prices last week set off a rare series of protests by opposition groups and activists in Burma. The price rises are most likely the result of the government struggling to fund domestic diesel subsidies, despite rising revenue from sales of natural gas, say some Burmese analysts.

Others point to the high cost of building Burma’s new capital city Naypyidaw for the shortfall in national revenues.

“It seems the government has no interest in solving the current fuel cost problem because they need for foreign income,” said Zaw Oo. “They spent lots of money on Naypyidaw and the new cyber-city in Pyin Oo Lwin [also called Maymo], in addition to raising the salaries of civil servants in the last year. So the government is only concerned with getting some of this money back.”