Drivers are angry that dropping international oil prices have not been reflected at the pumps in Cambodia; oil analysts say lower prices will come soon
Photo by: Tracey Shelton
Petrol prices remain high, even as international prices have plummeted.
AS international oil prices plunged in recent days to below US$80 per barrel, motorists in Phnom Penh have expressed outrage at what they see as collusion between the government and fuel companies to keep prices high in the Kingdom in order to maximise profits.
Petrol prices have dropped in Cambodia by about 14 percent from a peak of 5,700 riels ($1.40), when international crude broke $145 a barrel in July, to about 4,900 riels as international prices hit $80 per barrel on October 12.
"The price of gasoline always goes up rapidly but rarely goes down as fast," Ing Kosal, a motor taxi driver in Phnom Penh, told the Post this week. Prime Minister Hun Sen has made two requests in as many months for the Ministry of Economy and Finance and fuel import companies to reduce fuel prices, but motorists say prices remain too high.
Ing Kosal said petrol should cost no more than 4,000 riels per litre. He said he purchases about three litres of petrol a day and earns about 20,000 riels to support his wife and two children.
"My customers refuse to pay higher prices when they hire me because they don't have much money either," he said.
Srun Hiet, 48, also a motor taxi driver, said high petrol costs threaten his livelihood.
"I spend most of my day's wages on petrol, and I bring home very little because I need to pay for my meals during the day," he said.
He said high fuel costs are only part of the problem.
"Everything has increased in price, from the price of machine oil to the cost of a meal. But incomes have not gone up to balance expenses because prices of consumer goods have also gone up," he said.
Rong Chhun, the head of the Cambodian Independent Teachers Association, believes petrol prices should be no higher than 3,500 riels per litre.
"The government doesn't want to solve this problem, either that or they are not able or they get bribes from local investors," he said.
"The prime minister's words are worthless. He called for a drop in prices but not much has changed," he said.
Petrol companies say the reason for the high prices is that the oil was purchased at higher prices. "This is no excuse. You need to follow world trends and think about people," Rong Chhun said.
Chan Sophal, president of the Cambodian Economic Association, said petrol costs must drop to reflect shifts in the international market and advocated greater effort by the government to pressure petrol importers to adjust prices.
"It is not fair," he said. "They buy at a high price and need to sell at a higher price, but why don't they sell cheaper when the world price goes down?"
"Gasoline companies cooperate with each other to set market prices because they go up and down at the same rate," he said.
Bin Many Mialia, a petroleum analyst in Phnom Penh, said if the international price of oil remains at or below $80 for at least a month longer, petrol prices in Cambodia would drop to 4,500 per litre.
"Prices are lowered step-by-step because we need to set prices based on the average cost of previous and current imports," he said.
"Fuel companies may want to sell at cheaper prices, but they have not yet imported fuel at the lower international price."
Representatives from Total, Tela, Sokimex and Caltex declined to comment on Monday.