Bangkok, Thailand – Myanmar is grappling with a severe threat to its energy stability as its natural gas reserves, a vital revenue source for the State Administration Council (SAC), are anticipated to rapidly decline. This predicament intensifies the challenges faced by the military rulers in suppressing opposition to their regime.
Monthly electricity imports from China to Myanmar have more than doubled this year, as reported by the World Bank, amid ongoing discussions between Myanmar’s military authorities and Beijing, as well as Vientiane, on grid interconnection.
The SAC’s energy crisis has been exacerbated by recent offensives from resistance forces. Ethnic resistance groups, collaborating with anti-coup coalitions, have seized control of vast areas in northern Shan State, including crucial border crossings and trade routes with China.
To sustain military operations, Senior General Min Aung Hlaing and his forces have stockpiled diesel imports, worsening existing power shortages and plunging the country into a deepening fuel crisis, according to sources in Yangon.
The repercussions are evident on the ground, with petrol stations in Yangon experiencing supply shortages and long queues. The cost of electricity has surged significantly since the coup, leading businesses and citizens to rely on generators, exacerbating the economic strain.
Guillaume de Langre, an energy expert and former adviser to the Myanmar government, warns of the growing concern over declining gas production and the military’s hoarding of diesel imports. Hospitals face challenges in maintaining reliable electricity for crucial operations, amplifying the impact on public services.
As Myanmar’s gas reserves dwindle, neighboring China and Laos are unlikely to export power on a large scale, forcing the SAC to seek alternative energy sources. This scenario raises questions about the regime’s legitimacy, particularly following a nearly 20 percent contraction of the economy post-coup.
Myanmar, historically known for its low tax rates, heavily relied on revenue from offshore gas exports to Thailand and China. However, since the military coup in February 2021, state finances have sharply deteriorated, leading to a funding squeeze that affects the SAC’s ability to sustain operations, purchase weapons, and manage power cuts.
De Langre notes that half of Myanmar’s electricity comes from gas, and the looming crisis will exacerbate the current power cuts significantly. Gas exports also constitute a substantial portion of currency reserves, essential for the military’s needs.
Investors, including major players like Total and Woodside, have withdrawn from developing new offshore gas fields, further deepening Myanmar’s energy crisis. The output of key gas fields, including Yadana and Shwe, is expected to decline rapidly between 2025 and 2030.
In response to the energy challenge, the SAC is pushing ahead with the construction of dams, but the World Bank warns of delays due to insufficient resources and armed conflicts.
Despite the spiraling crisis, Beijing has increased electricity imports to Myanmar. However, experts caution that massive electricity exports from China and Laos are unlikely in the near future, as both nations prioritize domestic energy security.
The National Unity Government, established by overthrown lawmakers, has declared its reluctance to honor contracts or projects signed with the military regime. As Myanmar grapples with power cuts and a fuel crisis, the government-in-exile aims to rebuild the nation’s energy infrastructure and welcomes responsible investments in the sector for a democratic and stable Myanmar.