RPT-$100 oil to put Myanmar junta over
by Reuters UK
BANGKOK, Nov 12 (Reuters) - Oil was $72 a barrel in August when a budget crunch forced Myanmar's ruling generals to slash fuel subsidies, sparking protests that snowballed into the biggest anti-junta uprising in two decades.
Since then, crude prices have climbed 35 percent to near $100 a barrel, and with no new revenues coming in from natural gas sales or anywhere else in a shambolic economy, the regime has little option but to raise fuel prices again, analysts say.
"The pressure must be on," said Sean Turnell of Australia's Macquarie University and author of the Burma Economic Watch academic journal, predicting state-subsidised diesel, which doubled in August, may have to rise by as much as 40 percent.
The added burden on households already struggling to cope with inflation estimated at around 50 percent a year could well trigger another round of protests against 45 years of unbroken military rule.
Even though it is believed to have the world's 10th largest natural gas reserves, promising $2 billion a year in sales to China for the next four decades, most of the off-shore fields are undeveloped and will not make money until 2009 at the earliest.
The only major existing client is Thailand, which paid $2.2 billion last year -- half of all Myanmar's official foreign exchange earnings. The rest comes mainly from exports of gems and timber and tourism, a sector crippled by the latest crackdown.
Myanmar also has plenty of crude oil, but a lack of refinery investment since the British left in 1948 forces it to buy nearly all its fuel -- basically diesel, gasoline, and compressed natural gas (CNG) -- at a premium from abroad.