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Petrol prices dip for holiday

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Fuel prices are displayed on a sign in front of a petrol station last month in Phnom Penh as customers fill up their motorcycle. Vireak Mai

Petrol prices dip for holiday

Following another meeting between the Ministry of Commerce and petroleum retailers yesterday, both sides were unable to formulate a uniform pricing mechanism for petrol prices across the country, with Commerce Minister Sun Chanthol instead urging retailers to drop prices by 100 riel for the Pchum Ben holiday.

The meeting, which was held after oil companies operating in Cambodia submitted documents on their individual price structures, was unable to settle on a single, comprehensive pricing formula given the differing cost structures for each company, said Ken Ratha, spokesman for the Ministry of Commerce.

“It is difficult to decide one formula to fit all. Every company has its own internal information related to pricing and in a competitive market they are afraid, other companies will know their pricing strategy,” he said.

Ratha said that the ministry would meet each retailer individually to better understand their pricing structure before convening again as a group to set a pricing mechanism. A date for the meeting was not set.

Most of the participants at yesterday’s meeting agreed to a nominal price drop for the Pchum Ben holiday, one of the busiest travel times of the year. The 100 riel drop will be effective from today until October 15.

Representatives of Total and Chevron, however, said that they would have to check with their regional management before changing the price.

Bin Many Mialia, marketing division manager for PTT (Cambodia), said that despite global oil prices seeing a rising trend, the retailers agreed to a voluntary price drop only for the holiday period and would increase prices come October 16 to reflect global price trends.

“It is only a request from the minister to reduce 100 riel from the current price and not the new formula,” she said. “But, we cannot say if it will go up after Pchum Ben. It depends on global price – if it is down, we will keep the same price.”

Given the ministry’s suggested approach, opposition lawmaker Son Chhay, chief whip for the Cambodia National Rescue Party, said the ministry “requesting and begging” fuel retailers to drop their prices was not advisable, and instead it should work on a more determined and technical mechanism for petrol pricing.

“It is not effective and not a good practice in Cambodia, as we are in a free market,” Chhay said. “We should study to find the reasons why companies cannot reduce their prices when the global prices are down.”

According to Chhay, other measures such as limiting the number of companies that can import oil, and high taxation – which leads to tax evasion by companies – should be addressed simultaneously.

Local and international petroleum retailers attending yesterday’s meeting included PTT, Sokimex, Savimex, Tela, Total, Caltex, LHR and BVM Petroleum.

The government has held a series of meetings with petrol retailers since September to establish a flexible pricing mechanism aimed at ensuring that prices at the pump reflect fluctuations in global oil prices.

Global Brent crude prices at the time of press were $51.58 per barrel, down from $67.77 in May, but have increased close to a dollar over the last month.

Fuel prices at most petrol stations in Phnom Penh yesterday ranged from 3,750 riel per liter for regular to 4,050 per litre for premium.

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