Gas Prices Could Fuel Unrest

(Photo: Samorn Heng)

A group of civil society organizations in Cambodia warn of disorder if the government does not intervene.

2012-04-09

Radio Free Asia

A consortium of 20 civil society organizations petitioned Cambodia’s parliament Monday, demanding intervention to reduce the cost of gasoline in the nation, and warning of country-wide demonstrations if nothing is done.

The price of gasoline in the impoverished nation reached 5,950 riel (U.S. $1.49) per liter (0.26 gallons) Monday from 5,200 riel (U.S. $1.30) in May last year, which the groups said was far higher than that in neighboring countries. The cost of gas was 4,500 riel (U.S. $1.12) per liter in May of 2010.

The Cambodian prices are much higher than those among immediate neighbors Laos (U.S. $1.10), Vietnam (U.S. $ 1. 05) and Thailand (U.S. $1.27), fueling smuggling of gasoline into Cambodia to cash in on the price difference.

Phuong Sovann, president of the Government Civil Servant Association, which signed the petition to Cambodia’s National Assembly, said the high cost of gasoline could be attributed to a lack of competition in the country’s petroleum industry.

He said that the Cambodian government allows only a few gasoline businesses, which he pointed out are operated by the well-connected family members of the country’s political elite. He said those select few owners profit from their monopoly by setting prices as they please.

“In Cambodia, those who are close to the government, particularly those family members related to Prime Minister Hun Sen, run the gasoline business. As a result, it is difficult to operate a business in an atmosphere of a free-market economy,” he said.

“They [set the prices] as they want.”

He called on the government to grant permits for as many gasoline companies as possible, saying that the competition would naturally result in lower gas prices.

The group of petitioning organizations warned in a statement that the country could see nationwide protests and demonstrations if the National Assembly or government fails to step in and reduce the cost of fuel.

Sensitive issue

Fuel is a sensitive issue in the Southeast Asian region.

In recent years, high gas prices in Cambodia have driven up food and other household costs, leading parents to pull their children out of school to help support the family, particularly in remote areas of the country where assistance is needed with farming chores.

According to a 2009 survey conducted by the Cambodian Teachers’ Association, 36 percent of children quit school that year due to poverty and the high cost of living.

And in Vietnam, fuel prices jumped by 18 percent in February last year, prompting motorists to stand in long lines at the pump to purchase gas before the hike went into effect and causing traffic congestion in cities.

In Vietnam, fuel is often siphoned off and smuggled across the border to Cambodia to cash in on the higher prices, while gasoline smuggling from Thailand to Cambodia is also common.

Larger shipments of gasoline are smuggled to Cambodia via sea, while smaller shipments are taken across the border on land.

Authorities who catch smugglers often release them after being paid bribes.

In 2007, when gas prices soared in Burma, monks took to the streets of Rangoon to protest in what became known as the "Saffron Revolution," drawing thousands of people. The revolt was put down by security forces who killed at least 31 people and beat and detained hundreds.

Reported by Touch Yuthea for RFA’s Khmer service. Translated by Sum Sok Ry. Written in English by Joshua Lipes.