Myanmar's energy squeeze
Rising fuel, fertiliser and logistics costs are deepening Myanmar’s energy and economic crisis, compounding damage from ongoing conflict and political risk. (fulcrum.sg) That domestic squeeze also has a strategic angle: heavy rare‑earth supply chains tied to Myanmar strengthen China's market position, prompting calls for the Quad to diversify sources. (asiatimes.com) The combination of local energy shortages and critical‑minerals dependence is drawing increased attention from regional policymakers. (asiatimes.com)
Myanmar’s fuel shock is hitting farms, freight and factories at the same time, tightening an economic crisis that the World Bank still expects to end in contraction. (fulcrum.sg) (reliefweb.int) On March 20, authorities raised domestic fuel prices by roughly 1,000 kyats across major categories, while market monitors recorded diesel peaking near 9,000 kyats a litre that day in some areas. (bnionline.net) (themimu.info) The Joint Market Monitoring Initiative said average national prices climbed during March data collection in 60 townships across 16 regions, and availability worsened in Kayin, Sagaing, Bago East and Magway. Vendors reported rationing and black-market premiums as stations ran short. (themimu.info) Myanmar’s economy was already under strain before the latest fuel squeeze. The World Bank said on December 8, 2025 that gross domestic product would contract 2.0 percent in the fiscal year ending March 2026, with inflation staying above 20 percent in the near term and electricity supply still unreliable. (reliefweb.int) The March 2025 earthquake made that balance worse. The World Bank estimated output losses equal to about 4 percent of gross domestic product, or about $2.6 billion, in fiscal 2025/26, after direct physical damage of about $11 billion. (worldbank.org) (thedocs.worldbank.org) Higher fuel costs feed directly into food prices because Myanmar’s agrifood sector depends on diesel for tractors, pumps, milling and trucking. The World Bank said agrifood contributes 27 percent of gross value-added and 22 percent of manufacturing employment, while recent reporting said fertiliser costs and rationing were already hitting planting decisions. (reliefweb.int) (scmp.com) A second pressure point sits in Myanmar’s north: heavy rare earths, the less common metals used in magnets for electric vehicles, wind turbines, lasers and some military systems. The United States Geological Survey lists heavy rare earth uses from petroleum refining catalysts to high-strength magnets and medical equipment. (pubs.usgs.gov) Myanmar has become a key upstream source for China’s rare-earth industry. CNBC, citing Chinese customs data and Center for Strategic and International Studies analysis, reported Myanmar supplied about 57 percent of China’s total rare-earth imports in 2024, with shipments peaking near 42,000 metric tons in 2023. (cnbc.com) That trade is especially important because Myanmar’s deposits are rich in heavy rare earths such as dysprosium and terbium, while China dominates the refining and chemical separation needed to turn mined clay into usable material. Asia Times said that link is pushing the Quad countries — the United States, India, Japan and Australia — to look for other sources. (asiatimes.com) (cnbc.com) The result is a two-level squeeze. Inside Myanmar, fuel and power shortages raise the cost of moving crops, running workshops and rebuilding after the quake; outside Myanmar, the same country now sits inside a supply chain that other governments see as strategically exposed. (fulcrum.sg) (asiatimes.com)
