Industry Trend Analysis - Fuels Consumption Growth To Deepen Import Need - SEPT 2017
BMI View: Myanmar ' s refined fuels consumption is set to experience consistent , strong growth over our 10-year forecast period, due to strong economic growth, a rapid rise in car ownership and an upsurge in aviation traffic. This will deepen the country's dependence on refined fuels imports, providing growing trade opportunities for regional exporters, notably such as Singapore, China and India.
We expect refined fuels consumption growth in Myanmar to outperform the rest of Asia over the next 10 years (2017-2026). Myanmar's consumption will expand by 5.6% y-o-y, compared to Asia's average of 2.3%. The key drivers of growth in Myanmar will be positive economic performance and a gradually stabilising political and business environment, which will allow growth in major fuel-consuming sectors such as the industrial and transportation sectors.
In particular, demand for automotive fuels (gasoline, diesel) are set to be especially strong. Our Autos team expects rising consumer wealth and car ownership to rapidly expand the size of Myanmar's vehicle fleet at a healthy average annual clip of 13.9% over 2017-2021. Demand for jet fuel will see equally positive growth, nearly doubling over the next decade (albeit from a small base) as the number of inbound international visitors to the country increases. This has led Singapore-based firm Puma Energy to enter into a joint-venture (JV) with the Myanma Petroleum Products Enterprise (MPPE) in September 2015, to be the sole foreign importer and distributor of jet fuel, and invest up to USD77.0mn to significantly upgrade Myanmar's underdeveloped fuels pipeline network.
|Myanmar To Outperform Regional Peers|
|Myanmar - Refined Fuels Consumption, 000b/d (LHC) & % chg y-o-y (RHC)|
|Source: National Sources, JODI, EIA, BMI|