The current volatility of oil prices on the global market is bringing cuts in prices at Cambodia’s five main petroleum retailers. However, some observers say the current fall in prices is too limited.
Data from the Ministry of Commerce showed that super oil retailed at 5,200 riel per litre yesterday, compared to 5,750 riel in early May, a drop of nearly 10 per cent.
The regular oil price was 5,000 riel compared to 5,450 riel, a fall of 8.25 per cent, while diesel sold at 4,650 riel, compared to 5,100 riel per litre, a decline of 7 per cent.
Bin May Mialia, commercial manager of Thai-based PTT oil company told the Post that the Singapore oil exchange at closing yesterday showed that refined super oil was at US$104.18 per barrel, regular oil was at $101.89, while diesel was $111.160.
Some petrol stations in the Kingdom have been cutting prices since mid-May, he said.
“Now, the trend of the petroleum price is declining very fast on the global market. I also noticed that many other stations also dropped their prices many times since the middle of last month,” he said, saying that his stations currently sell at 5,200 riel per litre of super, 5,000 riel for silver, and diesel at 4,650.
“We see the situation in Europe is still in trouble so the demands on oil will also slow down, pushing the price down. Normally, our market mainly depends on the global market, whenever they decline or increase, we will follow,” he said.
Son Chhay, member of parliament for the opposition Sam Rainsy Party said that petrol stations could reduce prices further because of the sharp drop on the global market.
“Whenever the price on the global market rises, they start to increase prices very fast, but when it is comes down, they are a bit late in decreasing the price, by saying that they have not finished selling stock that they bought high, the government has to clearly check the issue. Don’t let them make so much profit.
“I think those big oil companies agree together on whether to decrease and increase the price,” he said.
Son Chhay said that Cambodia’s oil price is 30 per cent higher compared to neighbouring countries, claiming that government loses about 40 per cent of the revenue from tax collection on the industry as so much is smuggled in from Vietnam.
Sam Seoun, 39, a motor taxi driver in Phnom Penh also complained that the price should have fallen more sharply.
“Of course, we are happy with the drop, but it's still high. If it can reduce to less than 5,000 riel per litre, we could have some money to afford daily food for the family,” he said.
He said that he can earn between 20,000 to 30,000 riel per day, but it requires him to buy around two litres of petrol.
Meanwhile Hiroshi Suzuki, CEO and Chief Economist of the Business Research Institute for Cambodia says the decline will help Cambodia’s economy.
“When the international price declines this provides a very good effect for the Cambodian price of gasoline,” he said. “If the price is around 5,000 riel per litre it is very good for the Cambodian economy.
This is reflecting the trend of the international market.”
“It is difficult to estimate the future price, but for the time being I expect the price on the global market will stabilise. This means that price in Cambodia is also expected to be stable,” he added.
To contact the reporter on this story: May Kunmakara at [email protected]