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‘Slight’ logistics rate hike from Ukraine row

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The per-litre retail selling prices of regular EA92 petrol and diesel have been set at 4,800 riel ($1.18) and 4,500 riel, respectively, for the March 1-15 period. Heng Chivoan

‘Slight’ logistics rate hike from Ukraine row

Cambodia's logistics and transportation companies are considering a “slight” increase in prices due to the rising cost of fuel triggered by the Russia-Ukraine conflict, according to industry experts and key players.

Cambodia Logistics Association (CLA) president Sin Chanthy told The Post on March 14 that the Cambodian logistics sector, which has been severely affected by the Covid-19 crisis, now faces the problem of skyrocketing fuel prices that means knock-on effects on the industry will be inevitable.

Additionally, the Kingdom’s logistics sector has since the end of 2020 been facing exorbitant shipping costs to transcontinental locations such as the EU and US.

The sector is also facing a shortage of 20-foot shipping containers meant for transporting of goods because there has been an ongoing a delay in sending empty containers around the world – especially in countries where ports are congested, including Cambodia and Asia.

Now, the rise in fuel prices caused by Russia-Ukraine tensions has led logistics and transportation operators in Cambodia to consider a “slight” increase in prices to offset the increase, Chanthy said.

“We always have favoured consumers and businesspeople, but the petrol price has not been declining at all.

“We do not know when in the near future we might hike shipping costs a little higher to meet our expenses and to offset the costs, but it will have to happen because otherwise, carriers will lose out due to the price of increasing petrol,” he said.

Men Sopheak, CEO of rubber grower and exporter Sopheak Nika Investment Agro-Industrial Plants Co Ltd, noted that there has as yet not been any hike on the cost of exports despite the surge in global oil prices.

“We use our own trucks to transport our products to the border, and with fuel prices ticking up, it’s been costing us a pretty penny. But, overall, logistics costs have remained unchanged,” he said.

Royal Academy of Cambodia economics researcher Ky Sereyvath said he believes that the Kingdom’s transport sector should not increase its prices, given that the cost of transport in Cambodia is already higher than that of neighbouring countries and other ASEAN states.

He added that transport and oil-based companies in Cambodia should reduce their profit margins to keep fuel rates from rising too rapidly, by passing on such discounts to ordinary people who are “suffering” as a result of high prices.

“In this crisis, no one benefits. Yet the oil groups are still profiting a lot from importing oil. These companies enjoy low taxes and have high rates of tax evasion that lead them to be even more profitable,” he said, adding that this was true for transport companies as well.

Fuel prices at all retail stations have been set at 4,800 riel ($1.18) per litre for regular EA92 petrol and 4,500 riel per litre for diesel, according to a notice issued by the Ministry of Commerce.

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