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War to blame for diesel price spike

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A woman stops by a gas station in Phnom Penh. Heng Chivoan

War to blame for diesel price spike

The retail prices of regular-grade diesel increased 9.57 per cent on October 11, while regular-grade petrol was held constant, according to a notice issued by the Ministry of Commerce.

Analysts have pinned the upsurge in diesel prices on the Kingdom’s reliance on imports, coupled with a global shift to the fuel for power generation, heating and other applications, prompted by soaring natural gas prices stemming from the Russia-Ukraine conflict.

For the October 11-30 period, the retail selling prices of fuel in the Kingdom have been set at 4,250 riel or $1.03 per litre of regular EA92 (petrol with an octane rating of at least 92) and 5,150 riel or $1.24 per litre of 50ppm diesel (with sulphur content no more than 50 parts per million), said the notice, which contains values in both currencies.

The corresponding rates for October 1-10 were 4,250 riel ($1.03) and 4,700 riel ($1.15) per litre of regular EA92 and diesel, respectively, up from 4,100 riel ($1.00) and 3,750 riel ($0.92) during the period ended December 31, 2021.

Compulsory for licensed filling stations – although usually not strictly enforced for street vendors and in other circumstances, the rates are issued every first, 11th and 21st of the month, computed using data extrapolated from fluctuations in crude prices on the international market, and a number of taxes and charges that may be adjusted based on feedback from meetings with local oil importers and other stakeholders.

The commerce ministry’s Department of Private Sector Development is responsible for calculating the retail prices of fuel, according to an inter-ministerial prakas issued by the finance, commerce and energy ministries on March 22 that changed the bimonthly pricing routine into a thrice-monthly system.

The ministry notice shows that the current semi-monthly regular EA92 rate was computed by adding the $0.5743 average Means of Platts Singapore (MOPS) over October 3-10, $0.1716 in taxes and associated charges ($0.0847 in customs duty, $0.0200 in additional fees and $0.0669 in special fees) and $0.20 premium – summing up to about $0.946 – plus an extra 10 per cent surcharge on top of that and a one US cent discount from “the petroleum companies” for a total of $1.0305 which was then converted and adjusted to the final values.

Similarly, the diesel rate was formulated from a $0.8489 mean MOPS (over the same six working days), $0.0595 in taxes and associated charges ($0.0000 in customs duty, $0.0400 in additional fees and $0.0195 in special fees) and $0.23 premium – tallying up to around $1.138 – with a 10 per cent fuel surcharge and one US cent discount from the unnamed firms for a sum of $1.2422, which was then converted and rounded to the current values.

The given MOPS prices for petrol and diesel were 2.39 per cent and 11.43 per cent higher than the averages computed over the eight working days from September 21-30, or $0.5609 and $0.7618, respectively.

And as has been customary since May 21, the notice mentioned that the two current per-litre rates include a 6.5 US cent reduction greenlit by Prime Minister Hun Sen “to ease the people’s livelihoods”.

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