Phnom Penh Post, Issue 15 / 22, November 3 - 16, 2006
As other countries enjoy the cheapest gasoline prices since 1991, economists and the opposition are demanding to know why the price for petrol in Cambodia remains a record $1 per liter.
By November 2, the price for of crude oil had fallen to roughly $57 a barrel, a slide of more than 25 percent from a mid-July peak of $78.50, according to industry reports. In neighboring Vietnam and Thailand, the plummeting price has meant relief for motorists as the lower price has been passed on to the consumer.
The standard industry procedure is to adjust retail prices according to the fluctuations of crude oil price on the international market, according to Sok Hach, dirctor of the Economic Institute of Cambodia (EIC).
"Last year, when the international crude oil price was $60 for one barrel, the gasoline price in Cambodia was 3,800 riel per liter," Hach told the Post on November 2. "But now it [the international crude oil price] has fallen below $60 per barrel and the gasoline price in Cambodia has not fallen to 3,800 riel per liter - it remains between 4,100 to 4,200 riel per liter."
Currently in the United States, the price for a liter of regular petrol is between $0.52 and $0.59 (2,200 riel to 2400 riel). In Vietnam a liter of petrol is down to about 2,600 per liter and in Thailand roughly 2,800 riel.
According to opposition leader Sam Rainsy, the petrol prices have not changed in Cambodia in three-and-a-half months. Now he's written to government demanding an explanation, and alleging that the real reason is high-level corruption.
"There are two types of gasoline companies in Cambodia - Cambodian-owned and foreign-owned," Rainsy said. "The Cambodian firms are owned by powerful people and family members of the top leaders of the country and their business associates. They benefit from tax exemption and use their political power to influence the economy and to import gas and petrol products without paying taxes and customs duties."
Tela Petroleum Group Investment Company Ltd and Sokimex, or Sok Kong Import Export Company Ltd, are Cambodian-owned gasoline companies. Sokimex is owned by tycoon and former Phnom Penh Chamber of Commerce president Sok Kong, a longtime Hun Sen ally. Tela is allegedly owned by family members of the highest officials in the CPP regime. On November 2, the price of a liter of petrol at Tela was between 4,100 to 4,200 riel per liter.
"[The Cambodian owned companies] are making huge profits," Rainsy said. "They don't pay tax to the state, but they charge 1,000 riel of tax on every liter they sell and keep it for themselves. Also, they keep the retail price at the same level while the cost of purchasing goes down. They are bleeding the consumer."
Rainsy said that during his tenure as Minister of Finance between 1992 and 1993 there were roughly 10,000 cars registered cars in the country and Cambodia imported about 100,000 tons of petrol each year.
"Now, 13 years later there are 10 times more cars. There must be 100,000 cars or more, and yet the official amount of imported gas is still 100,000 tons," he said. "There is a big discrepancy between the increase in cars and the volume of gas imported over the last 10 to 15 years. I think nine-tenths of the gasoline imported into Cambodia is being smuggled."
An official at the Ministry of Commerce (MoC), who asked not to be named, said the Cambodian government has charged the same tax on gasoline and diesel since 1993. He said the government currently charges $344.55 in tax for every imported ton of gasoline and $144.15 per ton of diesel. According to the MoC official, one ton of oil costs a petrol company between $615 and $630 to purchase and import into Cambodia and $700 to $730 for diesel.
"The price of gasoline is high in Cambodia, and it may be because the supply is not equal or other factors," he said.
Citing figures from Cambodian customs authorities, the MoC official said in 2005 Cambodia imported 19,780 tons of gasoline and diesel. But according to his research, Cambodia consumes about 360,000 tons each year. He said more than 10,000 tons of gasoline are smuggled from into Cambodia from Vietnam and Thailand each month.
"We should not confuse the small smugglers who do it on the back of a motorbike to make a few extra dollars each month, with the people who use tankers and trucks," Rainsy said. "Sokimex, Tela, powerful people and even the army are using the private port at Ream. They deliver oil to the military base at Ream in Sihanoukville. They pay no customs and no duty and it is the army that is importing it directly. It's totally dark. There is no explanation."
Chea Sovanna, 28, a motodop driver, said the continuously high price of gasoline is reducing his family's living standard every day. Sovanna said he makes between 1,000 to 2,000 riel per paying for gasoline.
"Every day I almost get no profit from driving as a motodop because I nearly spend all the money I earn on buying gasoline and my customers still offer me the same price even though the gasoline price is high," Sovanna said. "I wonder why our country is different from others [keeping gasoline price high]?"
By November 2, the price for of crude oil had fallen to roughly $57 a barrel, a slide of more than 25 percent from a mid-July peak of $78.50, according to industry reports. In neighboring Vietnam and Thailand, the plummeting price has meant relief for motorists as the lower price has been passed on to the consumer.
The standard industry procedure is to adjust retail prices according to the fluctuations of crude oil price on the international market, according to Sok Hach, dirctor of the Economic Institute of Cambodia (EIC).
"Last year, when the international crude oil price was $60 for one barrel, the gasoline price in Cambodia was 3,800 riel per liter," Hach told the Post on November 2. "But now it [the international crude oil price] has fallen below $60 per barrel and the gasoline price in Cambodia has not fallen to 3,800 riel per liter - it remains between 4,100 to 4,200 riel per liter."
Currently in the United States, the price for a liter of regular petrol is between $0.52 and $0.59 (2,200 riel to 2400 riel). In Vietnam a liter of petrol is down to about 2,600 per liter and in Thailand roughly 2,800 riel.
According to opposition leader Sam Rainsy, the petrol prices have not changed in Cambodia in three-and-a-half months. Now he's written to government demanding an explanation, and alleging that the real reason is high-level corruption.
"There are two types of gasoline companies in Cambodia - Cambodian-owned and foreign-owned," Rainsy said. "The Cambodian firms are owned by powerful people and family members of the top leaders of the country and their business associates. They benefit from tax exemption and use their political power to influence the economy and to import gas and petrol products without paying taxes and customs duties."
Tela Petroleum Group Investment Company Ltd and Sokimex, or Sok Kong Import Export Company Ltd, are Cambodian-owned gasoline companies. Sokimex is owned by tycoon and former Phnom Penh Chamber of Commerce president Sok Kong, a longtime Hun Sen ally. Tela is allegedly owned by family members of the highest officials in the CPP regime. On November 2, the price of a liter of petrol at Tela was between 4,100 to 4,200 riel per liter.
"[The Cambodian owned companies] are making huge profits," Rainsy said. "They don't pay tax to the state, but they charge 1,000 riel of tax on every liter they sell and keep it for themselves. Also, they keep the retail price at the same level while the cost of purchasing goes down. They are bleeding the consumer."
Rainsy said that during his tenure as Minister of Finance between 1992 and 1993 there were roughly 10,000 cars registered cars in the country and Cambodia imported about 100,000 tons of petrol each year.
"Now, 13 years later there are 10 times more cars. There must be 100,000 cars or more, and yet the official amount of imported gas is still 100,000 tons," he said. "There is a big discrepancy between the increase in cars and the volume of gas imported over the last 10 to 15 years. I think nine-tenths of the gasoline imported into Cambodia is being smuggled."
An official at the Ministry of Commerce (MoC), who asked not to be named, said the Cambodian government has charged the same tax on gasoline and diesel since 1993. He said the government currently charges $344.55 in tax for every imported ton of gasoline and $144.15 per ton of diesel. According to the MoC official, one ton of oil costs a petrol company between $615 and $630 to purchase and import into Cambodia and $700 to $730 for diesel.
"The price of gasoline is high in Cambodia, and it may be because the supply is not equal or other factors," he said.
Citing figures from Cambodian customs authorities, the MoC official said in 2005 Cambodia imported 19,780 tons of gasoline and diesel. But according to his research, Cambodia consumes about 360,000 tons each year. He said more than 10,000 tons of gasoline are smuggled from into Cambodia from Vietnam and Thailand each month.
"We should not confuse the small smugglers who do it on the back of a motorbike to make a few extra dollars each month, with the people who use tankers and trucks," Rainsy said. "Sokimex, Tela, powerful people and even the army are using the private port at Ream. They deliver oil to the military base at Ream in Sihanoukville. They pay no customs and no duty and it is the army that is importing it directly. It's totally dark. There is no explanation."
Chea Sovanna, 28, a motodop driver, said the continuously high price of gasoline is reducing his family's living standard every day. Sovanna said he makes between 1,000 to 2,000 riel per paying for gasoline.
"Every day I almost get no profit from driving as a motodop because I nearly spend all the money I earn on buying gasoline and my customers still offer me the same price even though the gasoline price is high," Sovanna said. "I wonder why our country is different from others [keeping gasoline price high]?"
2 comments:
I have put my comment last night about retail petrol price in NZ but was deleted by the webmaster. Today petrol price in NZ is from NZ$ 1.329/L for regular and NZ$ 1.369/L for premium. Myself I can buy at NZ$ 1.26/L because I have a special schem for petrol discounted. At these price NZ government has taxed 64C per litre. THerefore the true price is only NZ$0.689 to NZ$0.739. At these prices, petrol companies are still making monies. All workers at petrol station is at least NZ$12/H. If we transfer this price to US dollars, it should be US$=NZ$ 1,46 >>>1 litre should be US$0.471 and US$0.521 because all Cambodian companies have never paid taxes. This is how Cambodian companies can make monies?
This is how Hun Sen government operates. It is no difference than mobster operates their ring. It is through these means cheating/stealing/threatening) that this government, this party survive. Smart government don't resort to these kind of things for their citizens.
Through my opinion, they will benefit more individually and government if they strengthen the rule of law and eliminate corruption. By going the straight, businesses will strive and therefore they will pay more taxes to the government. Everyone will benefit and the government will get more respect from the people. With the current situation no one get respected and no one wins except a few get really rich. From the balancing act stand point this is not healthy. The government lets a few people get really rich and lets a whole lot suffering. Now is that the right thing to do? Think of these, most of those people only have about 20 to 30 to live, do they need all that money?
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