Sokimex: Gov't Cannot Help Fuel PricesBy Heng Reaksmey, VOA Khmer
Original report from Phnom Penh
10 December 2007
Cambodia has seen increasingly high prices for fuel, including gasoline, in recent months. The high prices are cutting deep into the already precarious budgets of Cambodia's poor. But Sok Kong, the president of one of Cambodia's most influential fuel companies, Sokimex, said Saturday there was little the government could do. He spoke to VOA Khmer to explain why.
Q: Some political parties as well as civil society organizations officials say the oil price in Cambodia is much higher than in neighboring countries. So, what can you say about this?
A: Regarding this problem, I would like to put it this way. So far, the fact that the oil price in Cambodia is soaring is because the oil price in the international market is also increasing. So we just follow the international market. And the reason the neighboring countries' oil prices are still low is that their governments are able to subsidize to make up the loss so that they can keep the price low. But the Cambodian government is so poor that it is not able to subsidize to make up the loss and keep the prices low. If our government does this, how can our civil servants be paid? The civil servants' salaries depend on tax income, and if the government spends the budget from taxes to make up the loss, there is nothing left. It doesn't mean that the government ignores the problem.
Q: How does the price of fuel in Cambodia compare to that in neighboring countries?
A: Our oil price is the highest, higher than Vietnam, higher than Thailand. Why? Because Vietnam has the budget to subsidize to make up the loss, and they use money from their oil reserves and other things to make up the loss. And for us, we are so poor that we don't have that. We might be able to reduce the oil price in 2010 or 2020 when we can extract our crude oil.
Q: Can some major fuel companies in Cambodia reduce their fuel price if there are requests from the government?
A: Nowadays, we have already suffered from the loss as the oil price increases. I mean when the oil price was low, we made only a few cents, and when the price was increasing, we still sold it at that price. We could not increase it further because we did it according to the international price range.
Q: So far, there is criticism from some political parties as well as civic organizations that fuel companies pay too many taxes. Some of this does not go to the government's tax department, in the process of importing fuel into Cambodia. So could you explain how your company imports fuel into Cambodia?
A: The government has hired one private foreign company to check our fuel in Singapore and issue a certificate, and when the fuel arrives in the port of Sihanoukville, there are [customs] officials and tax department officials at the port to continue doing their jobs. And [these groups] just accuse us of doing this or that thing. We cannot do that, as we are a big company, not a small one. They just accuse us of doing all those things. It's hard to say because they are in politics; they just say whatever they want, and it affects the image of a big company and our business as a whole.
Q: Have any oil companies tried to evade tax payment so far or do they comply with the government's regulations?
A: I don't know about small companies, I don't know what they do, but big companies cannot do that. So far, as I have explained, we have reached a size that in 2009 or 2010 we are going to sell our stock. So, we cannot do anything like that, or it will be ruined. And we do not run the business by ourselves: we hire staff to manage. We could evade tax payment as long as our staff didn't know, but if they knew, we could not do that. [Groups] just accuse us with whatever they want, because they don't run a fuel business. If they did, they would know what it is like.
Q: Does your company have any strategies to lower the fuel price?
A: We have already reduced the price of our fuel. And why would we do that? Foreign companies sell their oil at 100 riel above our cost. We have already reduced the price. We are a private company, so we don't know what to do to lower it. If we do [more], we will suffer a great loss. How can we feed our staff?
Q: Some political parties as well as civil society organizations officials say the oil price in Cambodia is much higher than in neighboring countries. So, what can you say about this?
A: Regarding this problem, I would like to put it this way. So far, the fact that the oil price in Cambodia is soaring is because the oil price in the international market is also increasing. So we just follow the international market. And the reason the neighboring countries' oil prices are still low is that their governments are able to subsidize to make up the loss so that they can keep the price low. But the Cambodian government is so poor that it is not able to subsidize to make up the loss and keep the prices low. If our government does this, how can our civil servants be paid? The civil servants' salaries depend on tax income, and if the government spends the budget from taxes to make up the loss, there is nothing left. It doesn't mean that the government ignores the problem.
Q: How does the price of fuel in Cambodia compare to that in neighboring countries?
A: Our oil price is the highest, higher than Vietnam, higher than Thailand. Why? Because Vietnam has the budget to subsidize to make up the loss, and they use money from their oil reserves and other things to make up the loss. And for us, we are so poor that we don't have that. We might be able to reduce the oil price in 2010 or 2020 when we can extract our crude oil.
Q: Can some major fuel companies in Cambodia reduce their fuel price if there are requests from the government?
A: Nowadays, we have already suffered from the loss as the oil price increases. I mean when the oil price was low, we made only a few cents, and when the price was increasing, we still sold it at that price. We could not increase it further because we did it according to the international price range.
Q: So far, there is criticism from some political parties as well as civic organizations that fuel companies pay too many taxes. Some of this does not go to the government's tax department, in the process of importing fuel into Cambodia. So could you explain how your company imports fuel into Cambodia?
A: The government has hired one private foreign company to check our fuel in Singapore and issue a certificate, and when the fuel arrives in the port of Sihanoukville, there are [customs] officials and tax department officials at the port to continue doing their jobs. And [these groups] just accuse us of doing this or that thing. We cannot do that, as we are a big company, not a small one. They just accuse us of doing all those things. It's hard to say because they are in politics; they just say whatever they want, and it affects the image of a big company and our business as a whole.
Q: Have any oil companies tried to evade tax payment so far or do they comply with the government's regulations?
A: I don't know about small companies, I don't know what they do, but big companies cannot do that. So far, as I have explained, we have reached a size that in 2009 or 2010 we are going to sell our stock. So, we cannot do anything like that, or it will be ruined. And we do not run the business by ourselves: we hire staff to manage. We could evade tax payment as long as our staff didn't know, but if they knew, we could not do that. [Groups] just accuse us with whatever they want, because they don't run a fuel business. If they did, they would know what it is like.
Q: Does your company have any strategies to lower the fuel price?
A: We have already reduced the price of our fuel. And why would we do that? Foreign companies sell their oil at 100 riel above our cost. We have already reduced the price. We are a private company, so we don't know what to do to lower it. If we do [more], we will suffer a great loss. How can we feed our staff?
21 comments:
Well, when the stock market comes through, offer your staff a percentage of the stock. I know Cambodian economy will grow. We should build more companies and let foreign companies outsource in Cambodia.
Stop dreaming, 4:20, stock is not free; however, if employee what to buy it, they could.
Ah Sok Kong...face is Youn...and he speak Khmer pailam pailam.
His excuse is corrupted and avoid from real issue. Of course, government is advised by him that "inserting budget to support oil-price, have to reduce civil services salary".
This is what Ghai called the building of economic frightening.
Well, what Ah Chkout (Ghai) didn't know is "economic frightening" is not as frightening as "no economic growth".
hey ah pa'kach 7:30 AM
The Cambodia gov controls ah Srokey, X-youn soldier, Suck Kong, or ah Suck Kong control Cambodian gov?
10:05, where have you been? Didn't you know that corporations are bosses everywhere?
AH Sok Kong needs to come clean and be honest with Cambodian people! Cambodia don't just get oil from the oil but also from other source as well such Angkor Wat tourism, Garment, import and export...
It is a joke that AH SOK KONG doesn't know his bottom-line and allowed all the so called staff or the management to handle everything for him?
The very reason Cambodia has the highest oil price because AH SOK KONG is the father of black market! The oil is being ship through Thailane, Laos, and Vietname for the black market!
is someone dick over his head?
The price of gasoline is kept artificially high to ensure that Sokimex (owned by Sok Kong) and Tela (owned by Bun Rany) can smuggle cheap gasoline from Vietnam and make extraordinary profits. The ordinary people of Cambodia suffer because of the high gas and electricity prices.
10:05 AM
Ah pleu, what you mean economic growth when corrupted government cannot extract enough tax for national revenue.
What growth when people are suffering from this oil skyrocketing...and no clue to cure them.
don't be so bullshit man
hey ah lob, 1:16 PM
ah suck kong controls ah kvack. That is why ah kvack could low the gas price.
Gas price in Cambodia has been higher than the rest since amny years.
open your eye. ah you ah kvack too?
"Sok Kong on reducing price of fuel: Why would we do that? " :
Because there is the 2008 election. Too easy ;-)
All of you are wrong.
From 10:29AM Correction!
Cambodia doesn't just get tax from the oil only but also from other source as well such Angkor Wat tourism, Garment, import and export...
1:16, we are still ahead of the game from the 9.5% growth. Our inflation is only at 6.5%, dude.
To 8:41PM The inflation expert!ahah
Say what you think about Cambodian deflation? ahahhahhahah
"When inflation was high, wealth would be reallocated away from money and into physical capital."
http://research.stlouisfed.org/publications/review/96/05/9605mb.pdf
Another stupid theory that doesn't work for poor country or poor people, 8:59. Don't you hear people are complaining about high price of foods and goods? Don't you see our jobless people is getting eaten away by the high inflation year after year. Therefore, it can't be good if you don't have spare cashes.
To 9:34PM!
Well, tell me who has the money since Cambodian people don't have the damn money?
Cambodian people have been experience land grabbing by Hun Sen officials in economic development schemes over the years which is tell me that the money is being move into physical capital such land, farming, immovable object such commercial building, house,...Cambodian people may not have the money but it is the foreigners who have the money!
Over the years, there have some been economic growth and how is the growth possible when dirt poor Cambodian populations live on less than one dollar a day! Where do Cambodian populations find the fucken money to stimulate their economy? Again, it is the foreigners who stimulated those economic growths and you can say it is an artificial growth because Cambodian populations have yet to benefit from it!
What Cambodia needs is real growth where Cambodian population can benefit from it! Cambodia definitely needs new economic model because the current one ain’t working for dirt poor Cambodian people!
11:16, what Cambodia needed is a monsoon of money for about a month.
Come on, dude, you can't expect any growth to help everyone at the same time. Every year, our economic growth can only help about 10% of the people to account for the 10% growth. Realistically speaking, that will be about 300 thousands and we got about 3 millions to go. This is because the population are growing fast, but we started to catch up now. And by 2016, we should be able to help more than the population growth.
Inflation is running at a much higher rate than the official single-digit rates.
http://www.myp1t.com/blog/view/id_238/
Well, Ah Sok Kong he known only corruption with Ah SEN, So they hide the real situation in Cambodia, Indeed Ah Kong right Gov poor because Hun Sen family took all money sent in the bank oversea that why the country going Poor.
A lot of information about Cambodian economy is full of horseshit! The fucken information doesn't match what is going on in Cambodia today and I believe none of it!
Post a Comment