Prime Minister Hun Sen on December 12 signalled that a freeze on electricity rates may be extended, amid elevated global fuel and coal prices, to keep costs down for businesses and ordinary Cambodians.
The premier was speaking at a meeting with overseas Cambodians in the Belgian capital of Brussels on the sidelines of the ASEAN-EU Commemorative Summit, which he would co-chair two days later along with European Council President Charles Michel.
Despite Cambodia’s free-market focus, the government “actively” examines alternatives to raising electricity prices and thereby putting the burden on consumers, Hun Sen said.
Even though the bloated international fuel and coal prices of late could mean sizeable losses for national power utility Electricite du Cambodge (EdC), the government has refused to authorise an electricity rate hike, he affirmed.
“I’ve spoken again and again with the EdC, with the Ministry of Mines and Energy, asking them to hold the electricity rates,” he said, without detailing how long the agencies might be expected to do so.
Directly addressing the EdC and energy ministry, Hun Sen stressed: “I’m having the Ministry of Commerce coordinate, to ensure that you won’t have to hike prices on a whim.”
“During these times, the Royal Government, even in a market economy, must have guidance,” he said, cautioning that without proper direction, authorities could be tempted by an uptrend in international oil prices to press for a hike in electricity rates.
The commerce ministry has set the retail per-litre prices of regular-grade petrol and diesel for December 11-20 at 4,100 riel and 4,450 riel ($0.99 and $1.08), respectively, down by 100 riel and 200 riel from the previous 10-day period. For comparison, these were 4,100 riel and 3,750 riel during the period ended December 31, 2021.
Keo Mom, CEO of Ly Ly Food Industry Co Ltd, one of the Kingdom’s largest food processing enterprises, contended that Hun Sen’s remarks inspire great confidence among investors and other electricity consumers.
She commented that the availability and cost of electricity tend to be among the first inquiries made by businesspeople interested in setting up an enterprise in a new jurisdiction.
“The lower the electricity rates, the lower the production costs, and that will help sharpen our competitive edge over other goods, made all around the world,” she told The Post on December 13.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, welcomed Hun Sen’s commitment against an energy price hike, noting that low-cost electricity is crucial to sustaining household incomes and economic growth as well as luring investors into the Cambodian market.
By the same vein, decreases in electricity rates create opportunities that could allow Cambodian goods to sell better on international markets, he said, seconding Mom’s views.
“Energy prices have a truly powerful bearing on investors’ decisions, as a determinant for all the costs of production,” Vanak added.
In November, EdC director-general Keo Rottanak disclosed that the government currently disburses “about $120 million” a year in electricity subsidies to keep prices low and ensure ample domestic supply, which he said greatly improves people’s living standards.