Gasoline Retail Prices Creep Up In The Kingdom

Retail prices for gasoline have gradually increased by approximately 5 percent since December last year, raising concern from motorists that prices will hit the ceiling of about 5,000 riel per litre, which it was in the last few years before the government intervened and set a standard price formula for local sellers.

A petrol station attendant fills a motorbike in Phnom Penh. The spokeswoman for the Ministry of Commerce says the increase in price is due to external factors. KHMER TIMES / MAI VIREAK

Last March the government announced it would be standardising retail prices by pegging them to world oil prices in the wake of the plunge in global crude oil prices the year before. The Ministry of Commerce was tasked with releasing updated prices to all retail stations every 10 days, on the first, 11th and 21st of each month.

According to the retail gasoline price list from the Ministry of Commerce, the retail price for premium gasoline was selling at 3,850 riel/litre in the second week of August compared with 3,650 riel/litre at the end of December – a slight increase of about 5 per cent.

Regular gasoline was selling at 3,750 riel/liter in August from 3,600 riel/liter last December, a rise of more than 4 percent, while Gasoil was selling at 3,450 riel/liter from its price of 3,250 riel/litre last December, a rise of 6.15 percent.

Soeng Sophary, the spokeswoman for the Ministry of Commerce, said the increase in price was due to external factors rather than local sellers. “Of course, we recognised that the gasoline price increased this year,” she said. “This is mainly because of the rise in demand and the increases in crude oil prices on the global market. We have to be aware of the impacts on global oil prices due to the political and economic situation in the world – that’s why there has been an increase in the global oil price.”

The price of the OPEC basket of 14 crude oils stood at $48.69 a barrel on Wednesday, compared with $48.45 the previous day, according to the OPEC Secretariat’s calculations.

David Van, executive director of Deewee Management Consultants, said the crude oil prices as well as production would increase in 2017 compared with 2016, adding that this meant that retail prices of gasoline in Cambodia would reflect that increment.

“Considering that the Ministry of Commerce and local oil firms have agreed to a formula to monitor and set the domestic prices, such an increment of 5 percent seems a natural evolution of the market reality, though expected inflation for Cambodia in 2017 is approximately 3.2 percent,” he said. “Nonetheless, considering this crucial pre-electoral period from now to July 2018, it wouldn’t be surprising if the government intervenes further down the road to put a cap on any further increment of retail gasoline prices as populist policies seem to gain speed.” 

This article was originally published in the Khmer Times.  [democracy id="32"]