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Fuel-price formula is sent to Hun Sen

Fuel-price formula is sent to Hun Sen

After months of negotiations between the government and fuel retailers, a proposed pricing mechanism aimed at ensuring that prices at the pump correspond to fluctuations in global petrol prices has been submitted to Prime Minister Hun Sen for his approval.

The Ministry of Commerce forwarded the flexible pricing mechanism to the prime minister after conferring with other concerned ministries and holding one-on-one consultations with fuel retailers, Commerce Ministry spokesman Ken Ratha said yesterday.

“The formula is already submitted, but we don’t know when the PM will call for the next meeting,” he said.

The pricing mechanism was formulated in response to Hun Sen’s criticism on September 22 that petrol retailers operating in Cambodia were always eager to increase prices to reflect rising global increases in crude oil, but were considerably slower in responding to falling world oil prices.

“Oil prices in global markets have tumbled, but the price [in Cambodia] is decreasing very slowly,” he said. “Yet when oil prices [in international markets] go up, the price in Phnom Penh goes up quickly.”

After a series of consultations between the Ministry of Commerce and petrol retailers in October resulted in only a short-term drop in oil prices during the Pchum Ben holidays, Hun Sen declared last month that he intended to meet Cambodian fuel retailers individually to hammer out an agreement on a flexible petrol pricing mechanism. The meetings, however, did not take place.

Bin Many Mialia, marketing division manager of PTT (Cambodia) Ltd, said he was unaware of the final mechanism formulated by the Commerce Ministry, but said any mechanism that did not impose a uniform price on all companies would be welcomed.

“Different companies have different expenses, so the price can be a little bit different and the fluctuation could be a bit late,” he explained.

Mialia added that the pricing mechanism should also take into account the quality of petroleum sold to the public, where retail fuel prices should differ based on the quality of the product.

Prices at petrol stations in Phnom Penh yesterday ranged from 3,600 riel for regular gasoline to 3,900 riel for premium.

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