Local Economy: Oil Price Decline Affects Hand Diggers
The World Bank is raising its 2016 forecast for crude oil prices to $43 per barrel from $41 per barrel due to supply outages and robust demand in the second quarter.
Despite the recovery of oil and many other commodity prices in the second quarter of 2016, most commodity indexes tracked by the World Bank are expected to decline this year.
Energy prices, which include oil, natural gas and coal, are due to fall 16.4 percent in 2016, a more gradual decline than the 19.3 percent drop anticipated in April.
The decline of world oil price strongly affects Myanmar local workers, doing manual oil digging in Magway Region.
The income is not balanced with their investment in oil digging, said by the local workers nearby farmland in Yaynanma village, in MinHla township of Thayet district.
They do hand digging roughly around 950-ft to 10,000-ft which could cost around 3.5 million Kyats, equivalent to 3,500 USD.
As they don’t want to stop their routine production, they continue digging without profit despite poor production outcome and falling oil price.
“Energy exporting emerging and developing economies have struggled to adjust to persistently low prices,” said Ayhan Kose, Director of the World Bank’s Development Prospects Group.
“Partly because of the strong linkages between energy prices and agricultural commodities prices, agricultural producers can expect lower prices in an era of depressed energy prices. Both energy and agricultural commodity exporting countries need to step up economic diversification efforts to bolster resilience to commodity price fluctuations.”