The energy crisis poses a danger to Myanmar's generals' tenuous hold on power
Myanmar's vital natural gas reserves, a primary revenue source for the ruling State Administration Council (SAC), are anticipated to significantly decline shortly, posing a critical challenge for the struggling military leaders attempting to suppress opposition to their rule.
The World Bank reports that monthly electricity imports from China to Myanmar have more than doubled this year. Despite an energy crisis, exacerbated by recent offensives from resistance forces, the post-coup military authorities are actively engaging in grid interconnection discussions with Beijing and Vientiane.
Ethnic resistance groups in northern Shan State, collaborating with anti-coup coalitions nationwide, have successfully pushed the military out of extensive areas, taking control of border crossings and routes crucial for trade with China.
Responding to these challenges, Senior General Min Aung Hlaing and his forces have reportedly stockpiled diesel imports to sustain military operations. This exacerbates existing power shortages, plunging the country into a deepening fuel crisis, according to sources in Yangon. Some petrol stations in the commercial capital have run out of supply, leading to long queues until late at night.
The increased cost of electricity, up eight to ten times since the coup, has forced businesses and individuals to resort to generators due to fuel shortages. Observers note that the military's handling of the situation appears ineffectual, raising concerns about the economic impact of the shortage.
Energy expert Guillaume de Langre highlights the alarm in Myanmar over declining gas production and the military's hoarding of diesel imports. The shortage poses a severe threat to essential services, such as hospitals relying on reliable electricity for cooling medicine and samples.
Despite the looming gas crisis, experts suggest that neighboring China or Laos are unlikely to export power to Myanmar on a large scale before the country's gas reserves are depleted. This situation forces the SAC to seek alternative energy and revenue sources to avoid further legitimacy questions and economic contraction.
Myanmar, once recognized for having some of the world's lowest tax rates, heavily relied on state revenues from offshore gas exports to Thailand and China. The coup in February 2021 worsened the country's financial situation, with an investor exodus and tax boycott by the public.
The funding constraints may hinder the SAC's ability to sustain operations, including weapon purchases, and intensify power cuts, potentially leading to more resistance against military rule. Around half of Myanmar's electricity comes from gas, making the looming gas crisis a significant threat to the nation's stability.
Complicating matters further, major investors, including French company Total and Australian firm Woodside, have withdrawn from developing new offshore gas fields. The World Bank's September report emphasizes that by 2030, gas production is projected to be less than one-fifth of its 2022 levels, deepening Myanmar's power sector challenges.
