Critics say costs still not in line with international rate declines
Workers take a break from their jobs at a Sokimex filling station in Phnom Penh.
Cambodia's petrol suppliers will cut prices by 100 riels (US$0.02) today, a government official said, but critics argue Cambodia's prices are still out of step with the international oil market.
"From Monday, all oil suppliers have agreed to lower prices by 100 riels per litre," Finance Minister Keat Chhon told reporters last week following a meeting with representatives of Cambodia's six petrol suppliers.
Prices of Total and Caltex petrol reached 5,700 riels per litre last month. Sokimex and Tela petrol sold for 5,600 riels last month before gradually declining to 5,100 riels and 5,000 riels respectively last week.
The minister said the price drops will help keep inflation low but that the petrol price hikes remained substantially lower than those on the international market.
International crude oil prices soared more than 84 percent by June 2008, while the price of petrol in Cambodia only rose about 40 percent, the minister said, crediting the difference to the government's "silent subsidy" of petrol.
Cambodian officials say they have kept pump prices in check by not raising the import tax on fuel suppliers, a move they say has cost the government tens of millions of dollars in uncollected tax revenue.
Opposition lawmaker Son Chhay criticised the planned price drop, saying international prices fell up to 26.5 percent, while the cuts in Cambodia represent only a 10 percent drop.
Chan Sophal, president of the Cambodian Economic Association, said the price drop would do little to slow the Kingdom's rising inflation.
He said a virtual monopoly by Cambodia's few oil suppliers has kept prices high.
Heu Heng, deputy director general of Sokimex, told the Post Sunday that suppliers had to use up their stocks before buying oil at the lower price.
"We will cut prices further if the international market continues to drop."
Chhor Bonavy, head of the Excise Office at the Customs and Excise Department, estimated that petrol demand has increased more than 24 percent, or 144,537 tonnes, in the first half of 2008 compared with the same period last year.