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Covid jab campaigns fuelling petrol price hike

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A motorbike stands to fill up fuel tank at a gas station in Phnom Penh yesterday. Hong Menea

Covid jab campaigns fuelling petrol price hike

Retail petrol prices in Cambodia have soared since the beginning of this year, with observers suggesting that momentum in the world’s ongoing Covid-19 vaccination schemes has driven up international crude oil prices.

The retail selling price of petrol in the Kingdom from March 1-15 has been set at 3,700 riel ($0.91) per litre of regular EA92 – with an octane rating of at least 92 – and 3,350 riel per litre of diesel, according to an announcement from the Ministry of Commerce.

Compulsory for licensed petrol service stations but not for street vendors, the pricing serves as a tool to facilitate and enhance cost control nationwide and is calculated semi-monthly by the ministry using data extrapolated from fluctuations in crude oil prices on the international market.

Following a meeting with some of the Kingdom’s fuel distributors, the government agreed to reduce this fortnightly pricing by four US cents to safeguard people’s livelihoods.

Petrol prices have been trending higher since the start of this year, with EA92 pinned at 3,200 riel, 3,350 riel, 3,400 riel and 3,500 riel per litre for each of the four bi-weekly periods to February 28, and diesel pegged at 2,950 riel, 3,000 riel, 3,050 riel and 3,200 riel for the corresponding intervals.

An attendant at a Total petrol station in the capital who asked not to be named said her station strictly maintains the prices set by the ministry, adding that the 95-octane-rated Super petrol will sell for 4,200 riel until March 15.

“People always complain that the price of petrol is going up, but we are not the ones who set the prices, we merely follow the ministry’s instructions. If we don’t comply, we’ll be slapped with fines,” she said.

Nhim Kosol, business manager of derivatives broker Golden FX Link Capital Co Ltd, told The Post that the

major international benchmarks have ballooned to an average of around $63 per barrel and are in all likelihood behind the uptick in petrol prices in the Kingdom.

He contended that Covid-19 vaccination programmes around the world triggered the rise in international crude oil prices and are expected to deliver a massive windfall to the global economy, especially in the US.

US demand for crude has also risen sharply, at between one and 8.76 million barrels a day last week, he said.

“It is likely that [Cambodia’s] oil orders from abroad came in at high prices, so retail costs were set to hike up as a consequence,” Kosal said.

Brent crude was up 15 US cents, or 0.24 per cent, at $63.84 a barrel at 1404 GMT on March 2, after dropping 1.1 per cent the previous day.

West Texas Intermediate (WTI) crude was 23 US cents higher, or 0.38 per cent, at $60.87 a barrel at 1404 GMT on March 2, after falling 1.4 per cent the previous day.

As of 2020, there were a total of 4,000 petrol stations operating in Cambodia, but only about 700 were licensed by the ministry, according to a report by the Ministry of Mines and Energy.

Singapore-based oil and gas exploration company KrisEnergy Ltd on December 28 extracted the first drop of crude oil from Cambodian waters.

And Prime Minister Hun Sen said the PV Drilling III jack-up rig began drilling the second well of the five-well “Mini Phase 1A” mini-platform on January 30.

Once the mini-platform’s five wells have been commissioned and are operational, KrisEnergy Ltd will pump between 7,000 and 7,500 barrels of crude oil from the Apsara oil field, according to the prime minister.

The oil field is located in the northeastern part of the offshore Cambodia Block A concession in the Gulf of Thailand’s Khmer Basin.

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