THE government’s decision on the night of August 21 to allow car-owners to pay for fuel in FEC at any filling station – on top of their daily quota – had immediate effect: By the following day, the value of the beleaguered FEC had risen from K950 to K1100.

Motorists are still rationed to 2 gallons of either diesel or gasoline a day at the subsidised price but can now buy extra fuel at FEC4.20 for 1 gallon of diesel and FEC3.76 for the same amount of petrol. Before August 22, they could buy additional fuel only from either a handful of filling stations or at the inflated black market price.

A senior official with the Ministry of Energy confirmed the news to The Myanmar Times on August 22.

“We started selling gasoline [petrol] and diesel to car and vehicle owners who want to buy more fuel in addition to their fuel quota and are willing to pay FEC,” he said. “Motorists will be able to fill their fuel tanks now as long as they pay the balance in FEC.”

The announcement was welcomed by U Than Lwin, former deputy governor of the Central Bank.

“This is a very good step. It can balance the supply and demand of FEC,” he said. “The decision has created robust demand for FEC, which caused the FEC price to increase.”

He said another benefit of the policy was that it would enable the government to reduce subsidies on the fuel supplied to the public while increasing revenue from fuel sales.

U Than Lwin has previously advocated changes to the fuel subsidy scheme, including a two-tiered pricing structure that would see luxury car owners pay market price for their fuel.

The supply of fuel in the market has changed significantly as previously each vehicle owner could purchase only 2 gallons a day from filling stations. Now vehicle owners are only limited by the size of their fuel tank and the depth of their pockets.