Prime Minister Hun Sen has asked his government to consider stockpiling oil during the price downturn.
Speaking at a student graduation ceremony at Koh Pich Convention Center yesterday, the PM said, in anticipation of prices increasing in the future, the government would look into the prospects of building up a reserve of oil during the current slump.
“‘I recommended it to the minister of economy and finance already before I went to Davos to study the possibility of whether we can release some capital to buy a stockpile, in order to keep it as a reserve so that we will benefit [when it increases in the future],” he said. “As we are a non-oil producing country, we really want to see the oil price kept low.”
Cambodia imports all its oil from Thailand, Vietnam and Singapore. Crude oil prices, which fell from $115 a barrel in June of 2014 to a six-year low near $45 this January, recently bounced back to $52.30.
Suzuki Hiroshi, chief economist for the Business Research Institute for Cambodia, said that Japan had built up a strategic reserve following “oil shocks” in the 1970s and 1980s and Cambodia would do well to follow suit.
“This strategic reserve could be released at the time of crisis and/or very drastic fluctuation of oil price,” he said. “I hope that the Cambodian government could study these Japanese experiences, challenges and measures, because both countries are in the same position. They have to import all the oil products,” he said.