Transport Sector Troubled Despite Fuel Price Cuts


160823 b2b - news - Transport Sector Troubled Despite Fuel Price Cuts

Local petroleum prices may have dropped by nearly a quarter since the start of the year, yet companies operating in the Kingdom’s competitive transportation sector insist they have been unable to convert lower fuel costs into profits—even when maintaining their usual fees.

Earth Ang, Manager for minibus fleet Neak Angkor Express, said the company has stuck to its regular fees because the industry faces a number of issues that are negatively affecting profitability.

“Even though prices for petrol decreased, we were unable to generate any profits because there have been fewer international tourists and we are facing increased competition from other transportation agencies,” he said.

“If it weren’t for the decrease in the number of passengers, we would see profits grow.”

However, Sok Chheang, Head of the Cambodian Trucking Association said that lower fuel prices could marginally benefit the struggling transport sector and alleviate the impact of increasing operating costs.

“This could help boost profits, but there are still other growing expenses, such as labour costs and the price of renewing outdated machinery, which still hold profits back,” he said.

“On top of that, we also face increased competition in the market and we are forced to lower our prices to attract customers.”

Prices for regular gasoline and diesel have decreased by 20.41 percent and 23.41 percent, respectively, since the beginning of the year, according to the Ministry of Commerce

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