The retail price of petrol in Cambodia rose again on Tuesday, upsetting many who work in low-paying jobs, like tuk-tuk drivers and food vendors.
For 10 days through June 1, the price of petrol will be 4,300 ($1.058 at Tuesday’s exchange rate) a litre, up 200 riel from the preceding period, according to an announcement by the Ministry of Commerce on Tuesday.
The ministry recalculates the retail fuel price cap every 10 days, based mostly on the trading price of crude oil in Singapore.
Sitting on his motorbike in Phnom Penh on Tuesday awaiting customers, Chhoeun Borith, a tuk-tuk driver, was surprised to hear of the hike. Unable to realistically increase the fare he changes, the rise in the cost of petrol will eat into his income.
“The price increase is really affecting my income, but I dare not increase the fares I charge customers,” Borith said.
Explaining that he always followed the news on Facebook, Borith said the price for petrol in Thailand is cheaper.
“The price [in Thailand] is only 25 baht [$0.78] per litre, I really wonder why the price in Cambodia is so high, even though the government says it is controlled by price caps,” he said.
The Kingdom currently fills all of its oil needs through imports while Thailand is an oil-producing country.
Another disappointed petrol buyer is Nov Navy, who owns a grocery store on Street 242 in the capital. She was looking to expand her business but may postpone her plans if the petrol price continues to climb. “I can’t ride a motorbike as much as I want anymore as petrol has become really expensive. Besides, I need to save more.
“I hope the government will find a way to help poor people because if the price keeps rising, we will only suffer more,” she said.
Seang Thai, a spokesman at the Commerce Ministry, had previously explained that the formula devised for pricing petrol relied heavily on international oil prices, especially the rate it is traded in Singapore.
The price of international crude oil as of Tuesday was between $72 and $79 per barrel, according to data from Bloomberg.
Patrick Pouyanne, the CEO of French oil giant Total, said last week that the price could rise to $100 per barrel in the coming months.
Ngeth Chou, senior consultant at Emerging Markets Consulting (EMC), said the increase in the price of oil should be of great concern to Cambodia due to the major impact it could have on economic growth.
“It concerns the public because, when the price of oil rises very quickly, the government needs to increase the price of petrol just as quickly.
“This lowers consumption and impacts the economy,” he said, adding that some businesses will also increase the prices of their products and services when the petrol price rises.
Heng Lin, who runs a food stall, is one who is contemplating just that. “I don’t have an option as we need petrol to drive our vehicles. For now, I am taking a wait-and-see approach. But if the petrol price keeps increasing, I will start to raise the price of my food too,” she said.