Inflation fuels protest over petrol prices

People in the back of a truck shout and hold up signs during a protest in Phnom Penh yesterday during which the protesters appealed to the government to stop the rise in the price of gasoline. (Photo by: Pha Lina)

Monday, 08 August 2011
Tep Nimol
The Phnom Penh Post

More than 200 factory workers gathered at Freedom Park near Wat Phnom yesterday to urge the government to cut taxes on petrol, saying fuel prices were driving food prices beyond what they could afford.

But the government is doing all it can to curb inflation and has no control over oil prices, a government spokesman said.

Sath Chheanghour, president of the Cambodian National Confederation of Labourers’ Protection, said workers and motorcycle taxi drivers were being hard hit by inflation and were struggling to feed themselves and their families.

He called on the government to halve its import tax on petrol from 1,000 riel (US$0.24) to 500 riel a litre.

Fuel Smuggling Grips Region

A motorcyclist passes a line of vehicles waiting to fill their gas tanks in Rangoon, Feb. 22, 2011. (AFP)

2011-03-23
Radio Free Asia

A gasoline and diesel black market thrives in Burma, while an illicit border fuel trade haunts Vietnam and Cambodia.

People in Burma are grappling with a serious fuel shortage on the back of surging gasoline and diesel prices, but the commodity is being smuggled into China for higher prices there.

Compounding the problem is a black market for fuel in Burma itself, with residents having to wait for hours and dig deeper into their pockets to pay for daily supplies.

The higher fuel prices have sent food costs soaring, hurting average consumers in this impoverished military-ruled nation.

Hun Sen forced gasoline price reduction on crony companies, while foreign companies ignore his appeal

Gasoline price: Hun Sen obtained a price reduction from local companies while thrashing foreign oil companies

By Ros Dina
Ka-set
Unofficial translation from French by Luc Sâr
Click here to read the article in French
Click here to read the article in Khmer

On Monday 17 November, prime minister Hun Sen appealed to gasoline companies to reflect the lowering of international oil price on the retail price of gasoline at pump stations across Cambodia. His appeal was immediately followed by actions taken by two local companies: Sokimex and Tela [both of which belong to Hun Sen’s cronies] which announced a lowering of 200 riels ($0.05) and 150 riels ($0.0375), respectively, on the price of all their gasoline, before Hun Sen even finished his speech …

The lack of drop in gasoline price to reflect the price reduction of crude oil was denounced for the past several weeks, and up to now, nothing has changed. Such inaction led to criticisms on the government by both the consumers and the opposition parties.

“I ask that Sokimex and Tela to provide a gift to the prime minister [by lowering gasoline price]. And if they don’t want to give me this gift, they should at least do that for the people,” Hun Sen declared during the inauguration of a South Korean bio-fuel factory in the province of Kandal.

Hun Sen directly addressed his speech to representatives from the two local gasoline companies who were present, asking them to contact their respective management to obtain a quick response.

The Sokimex representative first announced a lowering price of 150 riels, then increased it to 200 riels, before Hun Sen even finished his speech… The Tela company maintained its price reduction to 150 riels per liter.

Hun Sen also thrashed the attitude of foreign gasoline companies which did not play by his rule. He then turned to the local companies, asking them not to wait for the price lowering from their foreign competitors, but instead for them to initiate the price reduction movement without fearing for their image. During a previous meeting held at the ministry of Finance, the Sokimex management justified maintaining a higher price for fear that consumers would associate lower price to lower quality. “Price can be lower, but the quality of gasoline is the same everywhere,” Hun Sen said.

“When the price of crude oil climbed pass $140 per barrel, the retail price of gasoline rose to 5,700 riels ($1.425 per liter). But now, while the price of a barrel drops to $54, the price [of retail gasoline] does not drop in Cambodia! We can understand that you have an old surplus stock, but why did it take so much time to get rid of it? […] I don’t understand,” Hun Sen pummeled. “If Caltex and Total do not lower their price, we will leave them alone, but nobody will buy from them.”

Next, Hun Sen justified the government inaction to obtain gasoline price reduction because of the need to respect “the free market and the WTO rules.”

On Monday morning, the retail price of one liter of super gasoline in Phnom Penh was at 3,900 riels ($0.975) at the Sokimex station, 3,800 riels ($0.95) for the regular gasoline and 3,700 riels ($0.925) for gasoil.

Sky-High Fuel Prices Hammer Mondolkiri

By Chiep Mony, VOA Khmer
Original report from Phnom Penh
03 November 2008

At his small wood-and-thatch home in Mondolkiri province, Nuon Vanna stared at his Korean-made motorcycle, which had gone neglected for days. The 41-year-old laborer from Lao Ka village said extra-high fuel prices made riding the thing prohibitive.

Prices in Modolkiri have reached 7,000 riel per kilogram liter, about 2,000 riel higher than in Phnom Penh. Many here blame it on a fuel monopoly in the province’s capital, and even roadside fuel vendors say they cannot lower it further.

When the fuel hit the already high price of 5,500 riel per week, he could still take his motorcycle to the woods and collect resin, he said. “But when the gasoline price became higher, I went …only once.”

The high fuel costs cut his income in half, he said, to about 12,000 riel, or $3 per trip to the forest. Now he goes on foot.

One seller in Lao Ka village, Khun Samnang, said the high prices were hurting her business, as potential customers like Nuon Vanna opted not to drive. Selling at 5,500 riel per liter, she would sell 60 liters of fuel a day, for a total of 330,000 riel, about $82.50. By last week, at 7,000 riel per liter, she was selling half that amount, earning a total 210,000 riel, about $52.50.

“When gasoline costs are higher, we have more difficulty to sell it,” she said. “My clients complain that gasoline is very expensive, and on the other hand they say they have much difficultly making money.”

Khun Samnang said she’d been importing fuel for the past two years from the only dealer in the province, a man named Leng Hour, who, other villagers say, seems to adjust the fuel price arbitrarily.

Leng Hour could not be reached for comment, and members of his staff in the provincial capital declined comment.

But residents here question the wisdom of having only one fuel distributor.

“I wonder, why does only one petroleum distributor operate his business here, and why don’t other businessmen come to distribute petroleum here?” asked Em Sopheak, coordinator of the Community Legal Education Center in Mondolkiri town.

The fuel is imported from Vietnam and distributed throughout the province’s districts, but the prices seem arbitrary, Em Sopheak said.

Mondolkiri Governor Lay Sokha told VOA Khmer he had never received a bribe from Leng Hour.

No company has ever built a petroleum station in the town, he said, and if it were not for Leng Hour, there would be no fuel to buy.

Meanwhile, the local company Tela was hoping to begin operating in the province in the next few months, Lay Sokha said, hoping to sell prices consistent with those in Phnom Penh.

Meanwhile, Hang Chuon Naron, secretary-general of the Ministry of Finance, said Monday the fuel prices in Cambodia are coming down, thanks to international market rates and government subsidies. The government paid an estimated $250 million to petroleum distributors so far this year, he said.

“We organize meetings with those petroleum companies every two weeks and ask them to bring down the petroleum price,” he said.

Government moves to end price gouging as gasoline prices hit record highs

Pump prices remain at records highs, hovering just below 6,000 riels per liter. (Photo: Tracey Shelton)

Friday, 06 June 2008
Written by Kay Kimsong
The Phnom Penh Post

Finance Minister Keat Chhon has ordered a special ministry committee to be formed to monitor the price of gasoline amid fears the fuel companies were gouging prices, which have crept towards record highs of 6,000 riels ($1.50) a liter during the past few days, a ministry official said.

The move, announced June 4, was the first time the government has intervened directly to try and ease spiraling gas prices, which have also driven up the cost of food and other consumer goods.

Finance Secretary of State Chea Peng Chheang told the Post that the ministry was worried that fuel companies were taking advantage of skyrocketing global oil costs to unfairly raise local pump prices

The new committee, while not putting caps on prices, would "work closely" with the fuel companies to determine how much should be charged for gasoline and diesel.

“Petroleum companies need not ask the ministry how much to raise prices, but they need to make sure they are not charging over market value,” he said.

The committee will also assess the cost of other consumer goods, which have risen sharply.

"The ministry just wants to understand why a company decides to raise prices for this or that, but the ministry will never interfere with a company's pricing decisions ... it is a free market in Cambodia," Chheang said.

Officials from fuel companies participating in the June 4 meeting with the finance minister said they welcomed the creation of the committee.

“I think the ministry wants to know the price of gasoline to make sure that petroleum companies are not overcharging,” said Hour Heng, vice president of the Cambodian fuel giant Sokimex.

“We accept the request of the ministry to control the price of gasoline and diesel,” he said. “It is an acceptable idea."

But they also pointed out that their pricing decisions were driven largely by international oil prices.

“We can’t predict future international oil prices and are not sure if the price of fuel in Cambodia will increase," Heng said, while Stephane Dion, managing director for Total Cambodge, wrote an email on June 5: “This is a simple question of supply and demand."

The government has already tried to curb the price of gasoline by not raising the tariff on imported fuel – a move that officials say will cost the government $300 million in uncollected tax revenue.

Diesel is currently taxed at $103 per ton, while the per ton tax on gasoline is $254.

Some one million tons of petroleum products, including gasoline and diesel, are imported each year into Cambodia, according to industry officials.

Even with this measure in place, fuel company officials say they are making very little money.

According to a senior official at Tela Kampuchea Company who did not want to be named, global oil costs have reduced the company's profits to about 200 riels per liter.

“We only make a little profit – many people do not know that," he said.

Commodities Prices in Phnom Penh Have Skyrocketed

5th April 2008
By Mayarith and Mundol Keo
Radio Free Asia
Translated from Khmer by Khmerization
On the web at http://khmerization.blogspot.com

A Radio Free Asia reporter, Mr. Mundol Keo, has reported that commodities prices have skyrocketed. Mr. Mayarith has asked Mr. Mundol Keo regarding the issues as follow:

Mayarith: Hello Mr. Mundol Keo. I would like to know about the general situation just before the Khmer New Year. What is your general observation about the commodities prices?

Mundol Keo: in Cambodia, and in particular in Phnom Penh, I noted that prices of almost all goods have increased dramatically, especially bus fares which have increased very high in anticipation of revellers returning back to their native villages.

For bus fares to the provinces such as from Phnom Penh to Siem Reap, the fares have increased from 16,000 riels (US$4) to 24,000 ($6) riels. I have asked a taxi driver from Phnom Penh to Neak Luong, Mr. Ross Mao, and he said that the Phnom Penh-Neak Luong taxi fares have increased from 10,000 riels ($2.50) to 15,000 riels ($3.75). And he said that by the 10th of April the fares will go up to 20,000 riels ($5).

Mayarith: I wanted to know why did the taxi drivers increase their fares?

Mundol: They’ve told me that all commodities prices have increased, especially petrol. Today’s price of leaded petrol is 4,900 riels per litre and the price of Super petrol is 4,950 riels per litre. This is the reason why they increased their taxi fares. They said that if they do not increase their taxi fares it is not commensurate with the petrol prices and also they won’t be able to keep up with the costs of living.

Mayarith: Other than what you’ve just told me, are there any changes in the prices of other commodities such as the prices of meat, fish and rice?

Mundol: I’ve noted that the prices of meat, fish and vegetable continue to rise. For the prices of rice, after the government released its stockpiles in a measure to contain the price increases, I’ve noted that the prices have dropped a little bit. At its peak, the prices of Maliss rice (top grade rice) had increased to 4,500 riels per kilogram, but after the government released its stockpiles the prices have dropped to 3,000-3,500 riels per kilogram. The prices of other low grade rice have dropped down to 2,500-3,000 riels per kilogram.

But the prices of other commodities have increased continually. The prices of chicken used to be 15,000 riels to 16,000 riles per kilogram but this morning they increased to 20,000 riles per kilo. And the prices of pork are the same, they continue to rise and no sign that they will come down any sooner.

So we see that prices of all commodities keep going up and up with no sign of stopping. The increases in the prices of goods and transport fares have impacted the livelihood of many people. One traveller named Yem Yuth, who is travelling to Krakor has asked Radio Free Asia to request to the government to help bring down the prices of commodities and transport fares.

Public servants have complained that their salaries have not gone up. They complained that as the prices of goods increased, they have impacted a great deal on their family’s livelihood. Even though they are moonlighting as motorcycle taxi drivers, they still cannot cope with the increasing costs of commodities, which are rising everyday with no sign of dropping.

Current gasoline price in Phnom Penh: 4,600 riels ($1.16) per liter

A gasoline vendor fills gasoline into bottles at a road-side store on the outskirt of Phnom Penh, Cambodia, Tuesday, March 4, 2008. The current price of gasoline in Cambodia stands now at 4,600 riel (US$1.16; euro.76) per liter. (AP Photo/Heng Sinith)
A Cambodian woman, right, cycles past a road-side store selling bottles of gasoline on the outskirts of Phnom Penh, Cambodia, Tuesday, March 4, 2008. The current price of gasoline in Cambodia stands now at 4,600 riel (US$1.16; euro.76) per liter. (AP Photo/Heng Sinith)
A gasoline vendor fills gasoline into bottles at a road-side store on the outskirts of Phnom Penh, Cambodia, Tuesday, March 4, 2008. The current price of gasoline in Cambodia stands now at 4,600 riel (US$1.16; euro.76) per liter. (AP Photo/Heng Sinith)
A Cambodian family passes by bottles of gasoline at a road-side store on the outskirts of Phnom Penh, Cambodia, Tuesday, March 4, 2008. The current price of gasoline in Cambodia stands now at 4,600 riel (US$1.16; euro.76) a liter. (AP Photo/Heng Sinith)

$100 million of gov't subsidies for gasoline in a country with the highest price in the region? Something is really amiss

Hun Sen: Gov’t “quietly” spends more than $100 million each year to hold down the price of gasoline

Friday, December 14, 2007
Everyday.com.kh
Translated from Khmer by Socheata

On Thursday, Prime minister Hun Sen declared that his government quietly provided funding of more than $100 million to hold down the price of gasoline.

During a speech given at the inauguration of a groundbreaking for a construction site to build measures to prevent flooding in Phnom Penh city, Hun Sen said that, each year, his government quietly provided a funding of $100 million to hold down the price of gasoline, and another $26 million to pay for the loss in the production of electricity each year.

Regarding the price increase of gasoline, Hun Sen said that it is not like the government should not (allow the price increase), but he said that (it has to be so) because Cambodia does not have oil wells, and even countries which own oil wells, such as Indonesia, the price of gasoline increases there as well. Hun Sen said that, in quietly funding to hold down the price of electricity, his government rather eat up the losses, that is why, even with the price of oil increasing, the price of electricity doesn’t.

Hun Sen also criticized some political parties which promised in 2003, that, should they win the election, they will lower the price of gasoline to 1,800 riels only (~$0.45) per liter, and some even went on to promise to lower the price of gasoline to 1,500 riels (~$0.38) per liter, he said that these were empty promises.

Hun Sen brought forth a number of reasons which pushed up the price of gasoline. He said that even Japan and the US which are superpowers, could not force OPEC from raising oil price, therefore, the (Cambodian) political parties have no power to dare claim that they can lower the price of gasoline to this or that much.

Recently, Hun Sen declared that foreign companies, which came to invest in oil exploration in Cambodian seas, will pump oil in 2010 from the wells they discovered. At that time, (with the potential oil revenue,) the government will have more possibilities to develop other fields.

CITA warns about gasoline price increase problem

A petrol seller near siem Reap, Cambodia. (AFP/File/Voishmel )

05 Dec 2007
By Moeung Tum
Radio Free Asia
Translated from Khmer by Socheata

Rong Chhun, President of the Cambodia Independent Teachers’ Association (CITA), told RFA on Wednesday afternoon that the price of gasoline keeps on rising, and it seriously affects to the livelihood of poor Cambodian people, teachers, government workers, soldiers, factory workers, and those who earn about 5,6000 riels (slightly more than $1) per day. This daily earning is barely enough to buy about a little more than one liter of gasoline.

Rong Chhun said: “Price of gasoline in Cambodia in the past few months rises to 4,550 riels (~$1.14) per liter. Recently, it just increased by another 100 riels to reach 4,550 riels per liter in Cambodia. It’s strange in Cambodia, because on the International market, the price of a barrel of oil came down to $88.71, but in Cambodia, the price increases instead. We can see that the government is not paying attention to resolve the price issues on the Cambodian market at all. On top of that, it allowed oil companies to increase prices the way they want it.”

CITA sent an official letter on Wednesday to Hun Sen, asking the current prime minister to resolve this issue for Cambodian people so they may survive.

CITA indicated that if the price of gasoline still remains high, a peaceful mass protest will be organized soon to demand for a reduction of the price of gasoline in Cambodia. As of Wednesday, Hun Sen’s government did not provide any answer yet regarding this demand.

Political Cartoon: Petrol's Price

Cartoon by Sacrava (on the web at http://sacrava.blogspot.com)

Fuel price increase is not the government problem!

Click on the article in Khmer to zoom in

06 November 2007
[Unorthodox] OpEd by James Sok
Posted online
Translated from Khmer by Heng Soy

Samdach Hun Sen said that the fuel price increase should be blamed on OPEC, and the government is not the source of the fuel price increase. This is rightly so because Samdach Hun Sen is only the prime minister and he is not a fuel dealer.

He already told everyone not to buy too many cars and motorcycles. He wants Cambodians learn how to walk so that they wouldn’t be affected by high cholesterol diseases. As for the transportations (of merchandises), Samdach wants the people to use carts pulled by oxen, buffaloes and horses, and if the markets are nearby, he wants us to learn how to carry (the merchandises) on pole over our shoulders, on our heads, on the backend of a pole over our shoulders, on our hips, or on our shoulders, and this also helps the environment as well. However, the population does not listen to him, therefore, how can anybody blame Samdach for the fuel price increase?

Gasoline, diesel prices soar by 10% in Cambodia [-Sok Kong of Sokimex: Don't blame me!]

PHNOM PENH, Nov. 6 (Xinhua) -- Gasoline and diesel prices have surged by around 10 percent at the pump in Cambodia, local media reported Tuesday.

Prices at Phnom Penh's Chevron (former Caltex), Sokimex, Total and Tela stations jumped to 4,450 riel (about 1.1 U.S. dollars) Monday from 4,050 riel (about one dollars) per liter for "premium" gasoline, the Cambodia Daily newspaper said.

Diesel prices also increased from 3,300 riel (about 0.81 dollars) to 3,650 (about 0.9 dollars) riel per liter, it added.

Cambodia would not join the ranks of other nations using subsidies to stabilize petroleum prices, Men Den, director of the Petroleum Exploration and Production Division for the Cambodian National Petroleum Authority, was quoted by the newspaper as saying.

When oil prices go up they tend to stay up, Men Den said, adding that Cambodia's as yet untapped offshore oil reserves are the best chance for bringing down costs.

Meanwhile, analysts cited strong global demand, geopolitical concerns and Cambodian taxes for the high prices that consumers currently face, the newspaper said.

Sok Kong, president of Cambodian petroleum company Sokimex, blamed the price increase on the world market, which has pushed crude oil prices to nearly 100 dollars per barrel.

He added that there seem to be no sign of the situation abating.

Report: Cambodia vulnerable to rising oil prices

PHNOM PENH, Oct. 30 (Xinhua) -- A sharp rise in the consumer price index (CPI) can be directly attributed to higher prices of gasoline, while Cambodia has been found to be extremely vulnerable to rising oil prices by the United Nations Development Program (UNDP), local press reported Tuesday.

Price hikes for goods and services led to a 4.47 percent jump in the CPI during July and September, as compared to the previous three months. The index includes the costs of food, beverages, tobacco, clothing and medical care, according to a report recently released by the Ministry of Planning's National Institute of Statistics.

Economist Sok Sina told the Cambodia Daily that the increased cost of gasoline has raised the price of transport and subsequently pushed up the price of imports, which will affect Cambodia's civil servants and its garment workers, two of the nation's lowest paid groups.

In its report "Overcoming Vulnerability to Rising Oil Prices," released on October 25, the UNDP warned that Cambodia is one of the most vulnerable nations in the Asia-Pacific region in regards to oil prices soaring on the international market.

Cambodia rated 22nd in the UNDP's Oil Price Vulnerability Index, which ranks countries in terms of their dependence on imported oil, behind only the Maldives and Vanuatu.

The three countries are the greatest at risk of detrimental impacts of increased oil prices as they have relatively low economic strength, lower economic performance and greater oil dependency, according to the UNDP report.

Oil prices in Southeast Asia have tripled in the last four years, and absorbing the growing price is a staggering issue for poor Southeast Asian countries, said Hafiz Pasha, UNDP Regional Director for Asia and Pacific.

Cambodian people are suffering from high gasoline prices, which are leading to sharp rises in the cost of meat, fish and vegetables, the Khmer Machas Srok newspaper reported.