Ditching clunkers, car imports drive Myanmar oil demand
By Florence Tan and Aung Hla Tun
SINGAPORE/YANGON (Reuters) - Myanmar businessman Lay has doubled the number of cars he owns to six in just three years, as reforms in Southeast Asia's poorest country unleash a wave of consumer spending.
The opening up of the economy, with a loosening of military rule ending decades of isolation, has meant a surge in ownership of second-hand Japanese cars that are replacing rusting, reconditioned British-era vehicles and boosting demand and imports of fuel.
Oil demand may have soared by as much as a quarter in the last financial year to March, giving oil traders a new market at a time when Asia is awash with fuel supplies due to a jump in refining capacity and cooling demand in top buyers China and India.
Two of Myanmar's three small refineries barely function, meaning the country relies on imports.
Myanmar has attracted a host of new suppliers from small, obscure oil traders to global trading giants such as Trafigura and Vitol, which are nipping at the heels of leading suppliers Chinaoil, PetroChina's trading arm, and Singapore's Hin Leong.
Fuel demand is also being boosted by more factories and as a mining boom lifts demand for diesel for machines and trucks.
The Southeast Asian nation remains, however, a tough market to crack given obstacles ranging from poor infrastructure to buyers being particular about the color of fuel they receive, traders say. Fuel is often sold in glass bottles next to the road and may be rejected by drivers unless it is clear, irrespective of performance.
To cater for higher demand, companies are planning to build new oil storage facilities and invest in petrol stations. Continued...