How to Navigate Myanmar’s Energy and Fuel Crisis?

On May 23, 2026, ISP-Myanmar held its fourteenth 30 Minutes with the ISP event, titled “How to Navigate Myanmar’s Energy and Fuel Crisis?” This English translation of the event’s recap memo was published on July 6, 2026. The original Burmese version was published on June 10, 2025. This publication is part of research conducted under ISP Myanmar’s Socioeconomic Studies.

▪️Concept Note

The main headaches at the recently concluded ASEAN Summit were the regional fuel crisis and food-security concerns. The current fuel shock emerged after the 2026 war involving Iran and the subsequent disruption of the Strait of Hormuz. Roughly 56 percent of ASEAN’s oil imports pass through that chokepoint in the volatile Middle East. The result has been soaring fuel prices, trade disruption, and growing pressure on regional energy supplies.

At the country level, the Philippines has been among the hardest hit. It imports around 90 percent of its oil from the Middle East and has only a few days of storage capacity. As a result, Manila declared a “National Energy Emergency” on March 24. For Myanmar, however, the fuel crisis is not a stand-alone shock. It is compounding an already severe set of crises. Given the country’s instability and deep fragility, Myanmar is especially vulnerable to cascading effects. It already ranks among the world’s most fragile states, and that fragility has worsened steadily since the 2021 military coup. Civil war continues across much of the country. The economy remains badly weakened, with output shrinking by two percent in the 2025–26 fiscal year. Although growth of 2.3 percent is projected for 2026–27, Myanmar will still struggle to return to its pre-COVID growth path.

The country has also suffered heavy destruction from the Sagaing–Mandalay earthquake. At the same time, the agricultural sector is under growing strain, with production continuing to decline across major growing seasons. Beyond acute fuel shortages, farmers face severe difficulty obtaining essential chemical fertilizers because of soaring prices. Unpredictable extreme weather adds a further layer of risk, threatening serious loss and damage to rural livelihoods. Restrictive trade policies and systemic mismanagement could create a perfect storm, in which multiple shocks converge at once. High pre-existing poverty, coupled with international sanctions and diplomatic isolation, only magnifies the damage.

Research by ISP-Myanmar’s emerging researchers shows that the ongoing fuel crisis is falling disproportionately on grassroots communities and the working class. The wider implications are considerable. Economic growth could slow further, poverty could deepen, and the risks of outright economic collapse or prolonged structural decline cannot be ruled out. Social instability is also likely to worsen as conflict intensifies, unemployment rises, and displacement grows. These trends pose serious structural risks to agriculture and food security, while threatening to deepen the social and humanitarian crisis in ways that may prove both severe and unforeseen. Greater instability and environmental degradation are also likely to follow.

Put simply, a fuel crisis hitting an already fragile state can trigger a compounding polycrisis. There are no easy policy fixes. In this episode of 30 Minutes with the ISP, ISP-Myanmar’s emerging researchers unpack how the public is experiencing this crisis, and how people are struggling to cope and survive.

Greetings to all Gabyin members attending today’s 30 Minutes with the ISP program. I am Zaw Htet. I will be the host for today’s session. Today’s program is the 14^th discussion session of the 30 Minutes with the ISP series. The topic for today’s presentation is “How to Navigate Myanmar’s Energy and Fuel Crisis?”

Emerging researchers from ISP-Myanmar leading today’s discussion are Ko Chan, Ko Khant, and Mary. After the panelists’ discussion, we will address questions collected in advance from the Gabyin Community, as well as questions and comments from today’s attendees. You can also send questions and comments via Live or the Q&A Chat.

Due to time constraints, if we cannot answer all questions during the event, we will respond via email later. Please note that questions and comments must not contain hate speech or derogatory remarks regarding race, religion, gender identity, or differing political views. These guidelines have also been shared via chat. Today’s program is being broadcast live on the DVB TV news channel and on ISP-Myanmar’s website and social media platforms. We will now begin our discussion. Ko Chan, the floor is yours. 

Thank you, Zaw Htet. Greetings to all our friends joining the 30 Minutes with the ISP, and thank you for taking the time to be with us. In the wake of the U.S.–Iran conflict, the fuel crisis has affected the whole world. Myanmar, like its neighbors, has also been hit hard. But in our case, the situation is even more difficult because the country is already facing ongoing conflict and severe natural disasters. In March, fuel prices—both petrol and diesel—rose sharply, beyond the reach of many people. Data here shows that Myanmar ranked among the highest in fuel prices in ASEAN. It has been more than two months since the crisis. People are still struggling with high fuel costs. At the same time, the cost of living continues to rise, while daily hardships such as power cuts and water shortages have become routine. So the question is: how do we cope and survive amid this fuel crisis? Today, we will examine why Myanmar is bearing a heavier burden from the fuel crisis, review the steps taken by the authorities in Naypyitaw, assess the impact across sectors and regions, and consider what practical responses and remaining options are available. To begin, let us first examine why Myanmar is facing such a severe impact. On that note, I would like to invite Khant to share his thoughts.

From my perspective, there are two key points. First, Myanmar remains heavily dependent on imports to meet domestic fuel demand. In other words, domestic production accounts for only about three percent, while the remaining 97 percent comes from imports. For example, Myanmar relies mainly on Singapore, Malaysia, and Thailand for fuel supplies (See ISP-DM2026-045). With the latest available data through 2023, I would also like to discuss the scale of that dependence. As the figure shows, about one-third of the country’s total annual import value is spent on fuel. In monetary terms, that is roughly USD 5.4 billion (See ISP-DM2026-046). And under current conditions, that import bill is likely to rise even further, while trade and transport on the ground will still have to keep operating.

The second point is the lack of preparedness. When a crisis hits, the real question is what measures are already in place to respond. For instance, regarding financial reserves, our neighbor Thailand maintains a dedicated fuel reserve fund for use in times of crisis. That helps prevent sharp price spikes and makes it easier to stabilize prices when disruptions occur. Governments in such settings can also use a range of measures to soften the blow and reduce hardship for the public. 

In Myanmar, by contrast, such mechanisms are largely absent. There is no dedicated reserve fund of this nature, and the government does not have sufficient capacity to directly subsidize or financially support the public from losses. As a result, the market reacts quickly to any news of instability, and opportunistic traders drive prices up sharply. At the height of the crisis, petrol—which had previously sold for around 4,000 kyats per liter—reportedly surged to as much as 12,000 kyats per liter in actual market transactions. In summary, this situation reflects a heavy dependence on imported fuel. It also highlights systemic inefficiencies that have intensified scarcity and hardship beyond what might otherwise be expected.

Yes. To build on Ko Khant’s point, I would highlight two underlying causes. The first is the lasting economic damage caused by the coup. The second is the impact of international restrictions.

After the coup, Myanmar’s economy deteriorated further. Data also shows that almost all foreign direct investment exited the country after the coup. According to ISP data, investment declined by up to 74 percent over a five-year period (See ISP-DM2026-047). When a shock of such scale hits, resilience during crises becomes very limited. The economy lacks sufficient financial capacity to handle the shocks. This further worsens the overall situation.

Before the coup, Myanmar’s energy sector was widely considered one of the most promising areas for investment with strong growth potential. Much of that was largely driven by the national goal of achieving universal access to electricity by 2030, which encouraged investment in the energy sector and infrastructure. But after the coup, the sector weakened sharply, and many companies withdrew. Another major setback came when Myanmar was placed on a money-laundering blacklist. At the same time, the regime imposed tighter restrictions on foreign exchange and imports. Together, these factors have further worsened the situation. 

So what we’re going through is like international isolation. When international aid is restricted, the situation becomes increasingly helpless. For instance, when countries such as the Philippines have faced similar crises, they have received support from partners such as the United States, Japan, and Malaysia. Myanmar, by contrast, has not had that kind of support. In addition to the points Ko Khant raised, two factors stand out: first, the economic downturn that followed the coup; and second, the international restrictions imposed on the country.

In this context, it is also important to look more concretely at what the authorities in Naypyitaw are actually doing. At the start of the crisis, there was little transparency over fuel reserves—how much fuel was available and how long supplies could last. Without communicating these, they implemented the odd-even driving days rule. That uncertainty triggered panic buying, with people rushing to queue for fuel. That was the first phase. Later, systems such as QR codes, the even–odd fuel rationing system, and quota-based distribution were introduced. But these measures, like the earlier ones, have often been rolled out in a confused and inconsistent way. 

Next, we observed that more priorities were given to the agricultural sector. For example, fuel has been provided to farmers at a subsidized rate of around 10,000 MMK per gallon. However, some fuel is produced locally, and large-scale machinery cannot use locally produced fuel. Another thing they did for farmers was tax exemptions granted for imported agricultural inputs such as fertilizer, as well as for petrol and diesel used in farming. Even so, these measures remain limited. On top of that, delays in import permit processing continue to create further problems. To be honest, Naypyitaw appears to be placing additional burdens on the public rather than easing them. That is my perspective on their current policy solutions. These are the three factors. I think we need to examine these three points and assess whether they actually work or not.

Yes, I would like to add to this point. When the fuel crisis first began, the issues related to supply shortages and inconvenience were most widely visible on social media. These reflected the difficulties faced by vehicle owners, various forms of inconvenience, and the expressions of hardship from much of the middle class. However, I would also like to highlight the struggles faced by grassroots communities.

Within this ongoing energy crisis, hardship is piling up in layers. As Ko Chan mentioned earlier, people are starting the day with repeated disruptions such as power cuts and water shortages. On top of that, they continue to face one difficulty after another. For many, daily life has become a constant struggle just to get by. As a result, many are left with constant concern about how to survive day to day. Frustrations are many, but people do not know where to officially complain or whom to turn to. So many are left to carry the burden themselves, finding their own ways to cope in silence.

For the middle class, the odd-even rule, not getting fuel, or not being able to go out, is definitely an issue. But for the working-class who must go out every single day for a living, this fuel shortage is a massive crisis. Take motorcycle taxi drivers, for example.  Most of them don’t have licenses, which means they aren’t even allowed to buy fuel at the stations. As a result, they have to purchase fuel from the black market at inflated prices just to continue working the next day and earn their daily income. This situation places a significant financial burden on them, often exhausting their already limited earnings. For those who do have access, long queues for fuel also result in lost working hours, forcing them to struggle to recover even basic operational costs. 

Moreover, as the rainy season approaches, construction workers are typically in high demand. However, even when work is available, they are unable to travel to job sites due to fuel shortages and a lack of licensing. At the same time, rural residents are unable to travel to towns to purchase goods, which in turn reduces sales for local vendors. Overall, this situation creates losses on both sides of the economy. We also observed that stored fuel is being resold in bulk on the black market at significantly higher prices, which appears to benefit a small group of intermediaries. In my view, these policy shortcomings have contributed to the expansion of the black market, while ordinary citizens continue to bear the unintended burden of these inefficiencies.

That’s right. It’s a total mismatch, showing the huge gap between the policies and what’s actually happening on the ground. For our next part, let’s discuss which sectors and areas are facing the knock-on effects of this fuel shortage. We’ll move on to that now.

In my view, this crisis had a massive impact on multiple sectors. I would like to focus on three key sectors among them. These are the logistics sector, which has been hit the hardest, as well as agriculture and manufacturing. The level of impact across these three sectors is significant. To begin with, the effects on logistics are perhaps the most visible. As soon as the fuel crisis emerged, long-distance bus fares and air-ticket prices rose almost immediately. In many cases, bus fares increased two to threefold at the onset of the crisis. The goods transport sector has also been severely affected, disrupting the supply chain. In practice, goods move from rural areas to urban markets, and from urban centers back to rural communities. As transport costs have surged, traders have found it increasingly difficult to manage.

The second sector to consider is agriculture.  The prices of essential fuel inputs, especially petrol and diesel needed for farming, have risen sharply, while access to them has become much more difficult. Fertilizer prices have also increased steeply. Now is the primary growing season. Compared to four months ago,  petrol prices have risen by roughly one and a half to two times. At the same time, we are seeing a growing presence of counterfeit products in the market, some reports that such goods are being mixed with low quality products and sold to farmers.

For the final section, I would like to talk about manufacturing. Across this sector, including micro, small, and medium-sized enterprises (MSMEs), production is coming under growing strain. In Myanmar, MSMEs are the main sector of domestic employment. According to the data, about 94 percent of businesses in the country are SMEs. So when these firms come under pressure, the wider economy feels it. The effects also spread to the businesses that depend on them—suppliers of raw materials, retailers and wholesalers, and transport providers. All are facing serious difficulties. There are now growing concerns that, as these pressures deepen, the country’s food security could also become increasingly vulnerable. The impact is visible in other sectors as well, but for this discussion, I would focus mainly on these three.

Yes, that is correct. I would also like to point out further. When we were talking with our young researchers at ISP Myanmar, we heard about all kinds of issues and impacts hitting sectors we didn’t even expect. It goes beyond daily survival; it affects health, justice, and basic rights in many ways. Take health, for instance. Some are incredibly vulnerable right now. Especially patients who need regular check-ups and ongoing treatment, like people living with HIV or TB. They’re taking a huge hit. In many cases, they can’t get to a hospital or clinic anymore, so they’re stuck at home without proper care. 

On top of that, we’re seeing major issues with water transport too. In areas that mainly rely on waterways, fuel shortages have forced boat services to cut back or shut down. Patients who need urgent hospital care can’t get there in time, and we’ve heard reports of people dying on the way. Fuel prices are so high that families are struggling to transport bodies for funerals. These kinds of tragedies are happening all the time now. Among these, one particularly distressing case may be deeply upsetting even for those listening now. It involves a rape case that took place in the Ayeyarwady Region. The survivor was scheduled for treatment by a doctor to prevent disease and unwanted pregnancy. At that time, the family sold whatever they had to travel to town and receive medical care. But when she had to return for a second appointment, she was unable to do so. Due to rising fuel prices and the high costs involved, she could not afford to travel again. 

Even though she knew exactly who the perpetrator was, she just couldn’t keep pursuing the case or get any justice because of all these challenges. The cost of travel and transport alone made it completely impossible to go any further. There was also no support from the local community, and as a result, the case remained unresolved. This is an extremely heartbreaking situation. And this is just one story we’ve heard. Similar distressing incidents are occurring regularly across many areas. These are the findings from our research. The fuel shortage has created severe hardships for the public, leading to tragedies that nobody really saw coming. However, these are brutal realities on the ground, and I would like to emphasize this point.

Right, absolutely, there must have been many heartbreaking incidents like these. Looking back at our discussion so far, we’ve covered three major areas. For this final section, we need to talk about solutions. What can the authorities in Naypyitaw, or the country as a whole, actually do about this? For this part, I’d like to split the discussion into two aspects. First, let’s look at the short-term measures that can be done, and second, the bigger, long-term considerations.

Starting with the short-term fixes, the first thing we clearly need is transparent communication for the public. When this crisis first hit, everyone panicked and rushed out to buy fuel. This was mostly due to the lack of clear and consistent messaging from the authorities. If you look at how other countries handle this, they put communication first. If we look at how other countries handle this, they put communication first. At the same time, they established task forces and managed the situation systematically. But in our country, nobody even knows who is actually authorized to give an official statement and who isn’t.

Another thing to look at is that, beyond the visible issues such as rising prices and fuel shortages, there are less-discussed challenges within the management system itself, including inefficiencies and constraints. For instance, a farmer has to fill out mountains of paperwork just to buy a bit of fuel, or how incredibly slow the import process is. These administrative headaches don’t actually cost a lot of money to fix, and they could be dealt with in the short term. But the real elephant in the room is the country’s limited foreign currency reserves, which have created a broader economic constraint. In this context, prioritization becomes critical. Rather than focusing on areas such as fuel for the jet fighters or other destruction that would cause public suffering, greater attention should be given to addressing socioeconomic issues. In the long term, it is important to recognize that the economy has continued to deteriorate over the past five years, and recovery is urgently needed. Sadly, current projections suggest that it may not recover even in a decade. These trends are supported by available data. Moving forward, a massive long-term challenge is energy security. Relying heavily on an external source is a huge structural risk. We need to diversify our resources, boost our own domestic capacity, set up actual fuel reserves and strategic reserve funds. To wrap things up, hitting these short-term fixes while planning for these long-term structural changes is the only way we’re going to tackle both the immediate crisis and the deeper issues ahead.

Thank you to all the panelists who participated in the discussion. Our preliminary discussion session has now concluded.  I would now like to move on to the Q&A session. I will invite a question and a comment from the participants here today. You can use the raise hand button to ask a question or join the discussion. Are there any raised hands?  At the moment, a participant named Phyo Thu Lwin has raised their hand in the chat. We will now turn on the microphone. Due to time constraints of the program, we kindly request that all questions and discussions be kept brief and delivered within a few minutes.

Gabyin Audience

Mingalarba. When it comes to the current fuel crisis, I really want to talk about the main struggles facing the working and middle classes. Right now, there are several pressing issues. For the middle class, take office workers, for example, some people can’t even commute to work regularly anymore because of the fuel shortage. Then you have the odd-even license plate rule, which leads to police inspections on the streets and heavy fines. For urban residents, it’s a massive headache and leaves them completely stuck. Because there isn’t enough fuel, some companies have had to cut their production by nearly 50 percent. And of course, that directly hits the employees’ wallets. In some cases, companies are only able to pay around 50 percent of regular salaries. I see this as deeply disruptive to our daily lives.

Transportation is taking a huge hit. And because moving around has become so difficult, commodity prices have skyrocketed out of control. Another thing is with taxis and Grab rides, drivers aren’t accepting the fares shown on the app anymore, and you’re forced to pay an extra fee on top of it. For lower-income groups, the situation is equally challenging. On top of the fuel shortage, there are necessary compliance with government regulations, such as holding licenses and wearing helmets. As a result of these restrictions, some individuals are unable to go to work and are forced to purchase fuel from the black market at significantly higher prices, often between 15,000 and 20,000 kyats. This has placed a severe burden on their livelihoods. These are the key challenges currently being experienced.

Then, if you look at agriculture, the current government hasn’t issued any clear regulations or directives for the farmers, so they’re facing immense struggles with their production. This is what we’re dealing with. Through all of this, we haven’t seen a single announcement from the government explaining when things might get better or how the situation will change. As such, the situation remains uncertain.

Comparing urban and rural contexts, urban populations appear to be relatively more stable as fuel availability has gradually improved to some extent. But rural communities, particularly those engaged in agriculture, continue to face more severe hardships. For instance, some farmers must travel up to 30 miles to access fuel stations and wait in long queues, which creates further inconvenience. At present, many are compelled to rely on the black market, purchasing fuel at significantly higher prices. Farmers, in particular, are increasingly dependent on the black market to sustain agricultural activities and prevent production disruptions. In conclusion, we would like to ask what types of improved policies and legal measures the current government should implement to address these challenges.

Thank you very much for your comments. We would now like to invite another participant who has raised their hand. We can see that a participant named Chit Min Nwe Kyi has requested to speak. Due to time constraints, we kindly ask the speaker to keep their comments brief and to the point. We will now give the floor to you.

Gabyin Audience

Thank you very much for allowing me to ask a question. I will keep it short. Regarding this crisis, which began with tensions between the United States and Iran around the Strait of Hormuz, I would like to ask for your views on when this situation is expected to end. What factors do you think could bring this crisis to an end? And for Myanmar, what possible exit options or pathways are available in relation to this situation? I would appreciate your insights on these questions.

Thank you very much for your question. We would now like to invite our researchers to share their perspectives on this topic.

Yes. From what I see, asking when this will finally end is a question the whole world is grappling with. But instead of just waiting around for things to blow out, we need to map out different scenarios based on how long this crisis drags on. And by scenarios, I mean different possibilities. What happens under one possibility? What happens under another? As a country, we really need to be weighing at least two or three different paths forward. Based on that, we need to prepare systematically: if the crisis hits a certain point, here is what we do; if it lasts this long, here is the next step. We need a proactive approach that anticipates issues, rather than a reactive one that blindly issues directives only after a crisis hits. Now, from what I’ve observed, that’s what the authorities are trying to find a way out. They’re reaching out to China to see if they can strike an energy cooperation deal, and heading to Russia to do the same. Sure, those efforts are happening. But these diplomatic moves aren’t going to give us instant answers. That’s why I firmly believe we need to tighten up our short-term strategies, meaning we need a rock-solid plan for what we can actually achieve right now, over the next two to three months.

Thank you for your discussion. Due to time constraints, we will conclude the Q&A session here. Regarding today’s discussion, do our panelists have any final remarks?

Yes. To conclude today’s discussion, I would like to say that the energy crisis is something the whole world is dealing with. But we really need to take a hard look at the root causes behind why it’s affecting our country so much more severely. I would like to emphasize two main points here. First, this energy crisis is a compounding crisis layered atop another. It’s the result of weak policy and management issues. Second, our country is currently in a highly fragile state, where it can easily deteriorate further. Furthermore, the civil war and international sanctions remain in place. More and more people are falling into poverty. In such a situation, it is likely that the country will require considerable time to recover and stabilize. Regarding the fuel issue, we observe that the middle class is better able to voice their difficulties, e.g. in the case of odd-even vehicle days, as they still have some capacity to cope. However, there are also grassroots populations who cannot even voice their struggles and instead silently endure daily hardship. We cannot forget them. It’s a situation where we urgently need to find answers from all sides to help them all pull through and stand back up. With that, I would like to conclude today’s discussion.

Thank you very much for the concluding remarks. You can access research data like today’s, as well as other findings, for free on ISP-Myanmar’s website, www.ispmyanmar.com, and on our social media platforms. I would like to express my special thanks to each and every member of the Gabyin Community who took the time to attend today’s 30 Minutes with the ISP program. With that, allow me to close today’s session here.