Myanmar protests stall fuel imports, drive up costs

* Banks, government, businesses paralysed by protests

* Kyat depreciation drives up fuel import costs

By Florence Tan

SINGAPORE, Feb 19 (Reuters) - Myanmar's refined fuel importshave stalled as protests over the Feb. 1 coup have shut thebanks and government offices necessary for trade, whiledepreciation in the nation's currency has driven up costs, fourindustry sources said.

The economy of the Southeast Asian nation has been pulled upshort by the biggest demonstrations since the "SaffronRevolution" of 2007, with protesters taking to the streets todenounce the military takeover and the unseating of ademocratically elected government.

Myanmar relies heavily on gasoline and diesel imports as itsrefineries are too small and old to meet its fuel needs. One ofthe sources said imports may make up as much as 98% of Myanmar'sfuel consumption.

The "economy is almost at a standstill. Almost allgovernment ministries are closed," the source said.

"Fuel supply is running low. (The country) might run out ofoil in two months."

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

A civil disobedience movement that is part of the protestsand calls on Myanmar people not to go to work has also paralysedkey government, business and 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 thereto (handle trade activity)," another of the sources said.

The first source said banks have stopped processingpayments, and the customs and commerce offices that processimport taxes and permits are not fully functioning.

A spokeswoman for Japan's Mizuho Bank said it has not closedits Myanmar branches or stopped operations there, although itwasn't 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 (terminals) don't have more shipments arrivinganymore," the source said.

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.

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

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