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Gas hike echoes thru market

Gas hike echoes thru market

C IVIL servants and moto drivers are complaining about a 25 percent increase in the

price of gasoline to 1,000 riel per liter.

It is the second major price hike this year. At the beginning of the year the price

was 600 riel. At mid-year, it went up to 800 riel.

Shoppers complained that the increase in cost of transportation was causing prices

of other commodities, including vegetables and meat, to go up as well.

The main reason given for the gasoline price increase was a 20 percent increase in

gas and oil taxes in early October.

Veng Tay, bulk sales manager for Shell company, said he received many complaints

about the price from customers coming in to fill up their bikes.

"The government does not understand the circumstances. The increase in the petrol

tax does not only badly affect our company, but also civil servants and people,"

he said.

A Sokimex official said the company may have difficulty selling its gasoline because

it is now more expensive than gas sold in neighboring countries. He said the company

has to compete with cheap gas being smuggled accross the border.

"We are not the ones who lose because we increase the price accordingly. The

ones who were badly affected were customers," he said.

The official said the price increases were the result of the 20 percent special tax

on gas that took effect Oct.2. Market vendors demonstrated against the tax hike Oct.

16 in Siem Civil servants, whose salaries may only be $20 a month, said that they

cannot afford the increase and would face problems with getting transportation to

work. The cost of taking a moto-taxi has also gone up, according to some moto taxi

drivers.Reap.

Shoppers complained that the price of other goods had gone up along with the price

of transport. Kim Mala, who was shopping at Beng Keng Kong market in Phnom Penh,

said the price of a khatna, a cabbage like vegetable, increased from 1000 riel per

kilo to 4000 riel, cucumbers increased from 800 a kilo to 2000 and cabbage from 800

to 1800.

Vendors said they had to raise prices because the cost of their transportation went

up due to the gas tax and flooding.

"It is automatic that the commodity prices rise following the petrol because

the transportation fare increases," said one customer.

.

Chea Peng Chheang, Under Secretary of State in the Ministry of Economic and Finance,

said there were many reasons for the increase in gas prices, but denied that a gas

tax increase was the cause. He said prices on average of all goods have gone up 6

percent this year.

He said the increases were caused in part by a 1 percent service charge alloted for

a quality control company, Societe General de Surveillance (SGS), approved by the

Ministry of Commerce and the Ministry of Economics and Finance. He said another reason

was that the cost of imported goods from Thailand rose due to flooding and that the

value of the riel has fallen against the dollar in the last few months.

Chheang said the government in October raised taxes on cars and a few other imported

luxury goods.

Chheang acknowledged that the price increases were not good for civil servants, but

also said that the government would prefer that people don't use cars.

"The government is worried if commodity prices increase, but is not if petrol

price increases because we hope people will reduce vehicle use," he said.

Some Khmers reacted to the price increases by quoting the popular saying, "Chuan

Ko Chen Lean Andat Khmer" (Squeeze a Chinese's neck, a Khmer's tongue sticks

out), a reference to the way restrictions on business ultimately affect poor Khmers.

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