Cambodia’s petrol retailers have been ordered by the government to hand over import information and financial records in what looks to be the first steps toward installing fuel-price legislation.
The Ministry of Mines and Energy (MME) announced publicly yesterday via state-owned media Agence Kampuchea Presse (AKP) that it has commenced preparing regulations to control prices at the pump and stop individual companies from deliberately overcharging.
“The Ministry of Mines and Energy began studying and preparing regulations relevant to oil price management in Cambodia as a mean to set changing prices of gasoline in accordance with that on the international markets,” the statement read.
All eight of the country’s petroleum importers and distributors will now be required to report the quantity of their imports, sales and stock levels every month to the MME, yesterday’s AKP statement added.
“The ministry starts to study different strategies toward the creation of the regulations … against any franchise businessmen who set price by themselves.”
Global crude oil prices have declined more than 50 per cent since July last year. Meanwhile, fuel prices among Cambodia’s top distributors have declined 20 per cent since November from 5,000 riel ($1.25) to just under 4,000 riel.
MME Minister Suy Sem ordered officials earlier this month to consider installing retail fuel price legislation into Cambodia’s new draft Petroleum Law, which is expected to go before the Council of Ministers later this year.
“We are trying to look at the best international practice – looking at all countries around the world that depend heavily on oil imports,” Meng Saktheara, secretary of state for the MME, said.
“It is a bit complicated because this kind of regulation needs to complement the Ministry of Commerce’s Anti-Competition Law and its Consumer Protection law, and it also need to be fair for businesses.”
Yesterday’s announcement comes after General Department of Camcontrol officials on Saturday conducted surprise inspections on Caltex, Total, Tela, PTT and Sokimex in Phnom Penh, examining the quantity and quality of the distributors’ fuel.
No discrepancies were identified, Camcontol reported.
Hiroshi Suzuki, CEO of the Business Research Institute of Cambodia, welcomed the government’s review yesterday he said was a safer approach to market interventions such as government subsidies.
“The Ministry’s approach to request the quantities seems appropriate,” he said in an email. “Many countries have faced difficulties in trying to control the price directly,” he added, citing the case of Indonesia, which recently scrapped fuel subsidies its government said were the cause of political tension and budget deficits.
“[Indonesia’s] subsidies to keep the oil price lower had many bitter experiences because the market’s power is much stronger than the government’s.”
Suzuki recommended a stockpile regime whereby the Cambodian government would increase its oil reserves in case of future shortages or a sudden and dramatic global price increase.
“This strategic reserve could be released at the time of crisis and/or very drastic fluctuation of oil price.”
Reached yesterday, Bin Many Mialia, deputy managing director for corporate affairs at Thai-owned PTT (Cambodia) Limited, said that he was currently overseas and had not heard of the governments announcement, but it was something he would address on return to Cambodia.
Other major petrol retailers could not be reached for comment yesterday.