|
YANGON, Oct 23 (AFP): Transport costs in Myanmar skyrocketed this week after the junta raised the official price of fuel eight- fold, sending commuters scrambling onto decaying trains for cheaper rides.
In a shock move that stoked fears of massive inflation, official fuel prices soared from 180 kyat (about 14 cents) per gallon for petrol and 160 for diesel to 1,500 kyat (1.20 dollars) Thursday.
Passing on much of the price hike to the public, bus operators immediately quadrupled their fares, and taxi drivers doubled their rates, while only Yangon's decades-old inter-city train charged the same. Myanmar's economy has been reeling under decades of mismanagement by the military, and EU and US sanctions tightened since the detention of opposition leader Aung San Suu Kyi in May 2003 have bitten hard.
Zaw Oo, a Myanmar political economist at American University in Washington, said that Myanmar is especially vulnerable to rising world prices because the junta buys diesel on spot markets, without committing to long-term contracts.
"Since Myanmar is a net importer of diesel fuel, the increased oil price has further eroded Myanmar's balance of payment positions, drawing its currency to the lowest ebb," he said.
"Weak fundamentals account for high inflation, and the economy is structurally so weak that the inflationary pressures are expected to rise further."
Inflation now has the people of Myanmar, also known as Burma, deeply worried. The knock-on effect of the steeply higher oil prices on public transport was immediate.
|