The Cambodian government is again urging petrol retailers to pass on savings to the consumer amid the continued plunge in global oil prices, which hit a new five-year low yesterday.
As global crude oil prices yesterday reached $47 a barrel, Prime Minister Hun Sen, at the opening of the new hydro-dam project in Koh Kong said that foreign retailers, Total and Caltex, were stalling on passing on the savings to consumers at the pump.
He said that Caltex and Total were charging 4,100 riel ($1.03) per litre for diesel, 4,250 riel per litre for regular petrol and 4,450 riel for super, while local retailers Sokimex and Tela were charging 4,000 riel for diesel, 4,200 riel for regular and 4,400 riel for super.
“The petrol station companies from abroad are still selling at a higher price than the locally owned ones,” Hun Sen said.
“But for the foreign company or the local company, please check the possibility of reducing prices further.”
Chanlek Than, spokeswoman for Chevron, which operates its Caltex service stations in Cambodia, insisted that the company had installed a series of fuel price reductions in response to Cambodia’s domestic fuel market.
Caltex’s Gold branded petrol currently sells for 4,450 riel per litre, Silver (regular) branded fuel is selling for 4,250 riel per litre, and diesel is selling for 4,100 riel per litre, according to the spokeswoman.
“Chevron [Cambodia] Limited closely monitors the fuels marketing landscape in Cambodia, and pump prices are dependent on a combination of several factors including currency exchange rates, market demand and competition,” Chanlek explained.
“We have implemented several price reductions, with the most recent being on January 9, 2015.”
The premier’s criticism of foreign fuel retailers comes after the minister of commerce, Sun Chanthol, on Friday met with fuel retailers for the second time in as many months requesting further price reductions.
Sokimex, Thailand’s PTT and BVM in November agreed with the MoC to drop their average prices from more than 5,000 riel per litre to close to 4,700 riel per litre. Smaller petrol provider Savimex reduced its prices to about 4,400 riel per litre.
According to ministry spokesman Ken Ratha, fuel retailers have reduced prices three times since November, and regular gasoline prices are this week sitting at about 4,150 riel – ranging from 3,800 riel to 4,250 riel.
“The [Friday] meeting was intended to facilitate and to discuss with the main petroleum distributors the situation of the global market, their challenges and methodology in setting the prices, making sure that we are following global prices for the benefits of people and the country,” Ratha said.
Ratha said that the government was being careful not to influence competitiveness in the fuel market and that industry representatives have now agreed to review gasoline prices every 10 days.
“It is a free market in Cambodia and we respected this in our discussions,” he said.
But scepticism remains over whether Cambodia’s petrol retailers are deliberately stalling on dropping prices in line with the global oil-price slump, which has seen prices fall more than 50 per cent from $95 a barrel since July last year.
“They are making huge profits by delaying passing on the ongoing fuel price decrease,” opposition Cambodia National Rescue Party leader Sam Rainsy said in an email.
“This is possible because the industry is dominated by a small number of politically well-connected companies,” Rainsy added, without naming specific companies.
The CNRP leader called for a more stern government approach and to issue petrol companies with clear directives to pass on savings to the consumer. Rainsy also called for a reduction in gasoline taxes and better transparency to gauge more accurately the companies’ fuel pricing policies.
But despite criticism over the pace of petrol companies’ price reduction, Hiroshi Suzuki, chief economist at Business Research Institute for Cambodia (BRIC), said gasoline prices in Phnom Penh were on par with much larger economies.
“Because the international transaction of oil is usually by the long-term contract, the price movement at the gas station has some time lag,” he said.
“However, even in Cambodia, the gasoline price has been decreasing. The price in Phnom Penh has already decreased by around 18 per cent. In Japan, the gasoline price has decreased around 19 per cent from June 2014 to now.”