UPDATE 1-Myanmar protests stall fuel imports, drive up costs

* Banks, government, businesses paralysed by protests

* Kyat depreciation drives up fuel import costs(Adds quotes)

By Florence Tan

SINGAPORE, Feb 19 (Reuters) - Myanmar's refined fuel importshave stalled as protests over the military coup have shut banksand government offices, while a depreciation of its currency hasdriven up costs, five industry sources said.

Myanmar relies heavily on gasoline and diesel imports as itsrefineries are too small and old to meet its fuel needs. Onesource said imports may make up as much as 98% of Myanmar's fuelconsumption.

"The economy is almost at a standstill. Almost allgovernment ministries are closed," the source said. "Fuel supplyis running low. (The country) might run out of oil in twomonths."

Reuters was unable to reach Myanmar government officials forcomment. The five sources declined to be named due to thesensitive nature of the topic.

Tens of thousands of protesters have taken to the streets todenounce the coup that ousted the democratically electedgovernment on Feb.1. A civil disobedience movement that calls onpeople not to go to work has also paralysed government, businessand banking functions.

"One of the main problems is (the movement) telling people,'Don't go to work'. So banks are shut and there's nobody there,"another of the sources said.

The first source said banks have stopped processing paymentsand the customs and commerce offices that process import taxesand permits are not fully functioning.

A spokeswoman for Japan's Mizuho Bank said it has not closedits Myanmar branches or stopped operations there, although itwas not clear what services it was offering.

Oil import terminals operated by Puma Energy and PetroChinasubsidiary Singapore Petroleum Company have stoppedoperating, although other terminals owned by local companies arestill operational, the source said.

"But most don't have more shipments arriving anymore," headded.

Puma Energy - whose main shareholders are commodity traderTrafigura and Sonangol Holdings - said on Feb. 10 that itsterminal had been shut. PetroChina did not respond to a Reutersquery on the status of its operations in Myanmar.

LOCAL FUEL PRICES UP A THIRD

Oil trading companies have also become more cautious insupplying fuel to Myanmar amid the political and economicupheaval and as a sharp drop in the value of the local currencyhelped to drive up importers' costs.

The kyat has lost 6.5% against the U.S. dollar sincethe start of February, Refinitiv data showed, and local gasolineand diesel prices have risen by about a third since end-January.

Myanmar's oil importers used to be given credit terms of upto 90 days by having their banks issue letters of credit (LCs),but fuel suppliers are no longer accepting LCs from Myanmarcompanies, the sources said.

They have instead asked for telegraphic payment in advance,the sources said, although this is not possible without banks.

One source said they were trying to look for sources of U.S.dollar offshore from people who are willing to accept Myanmarkyats in Myanmar.

"Until banks open it's not easy for anyone to perform theirtrades," a fourth source said.

(Reporting by Florence Tan; Additional reporting by TakashiUmekawa in Tokyo, Cheng Leng in Beijing and Chen Aizhu inSingapore; Editing by Tom Hogue)