Petrol prices jump 3pc with more hikes likely

Photo by: Sovan Philong
Customers leave a Sokimex petrol station in Phnom Penh on Wednesday

The Phnom Penh Post
Thursday, 13 August 2009
Nguon Sovan and Chun Sophal

Rising global oil costs blamed for price climb at local pumps

PRICES at petrol stations climbed about 3 percent Wednesday, despite calls last week from Prime Minister Hun Sen for lower fuel costs, and petroleum officials said additional price spikes should be expected as world oil prices rise.

Caltex, Total and Tela stations on Wednesday raised petrol prices to 4,200 riels [US$1.02] per litre for super petrol, from 4,050 riels Tuesday, and 3,950 riels for regular petrol from 3,850 riels.

Sokimex prices also rose to 4,150 riels for super from 4,000 riels, and 3,900 riels from 3,800 riels for regular.

Bin Many Mialia, business division manager at the Thai energy firm PTT, said Wednesday that oil prices have sharply increased in the last few weeks, which he attributed to a devaluation of Cambodia's currency and weather-related transportation difficulties.

He added that there were no signs that petrol prices would drop. "If the price of crude or refined oil remains flat for another week, we will increase our prices an additional 100 riels to 150 riels per litre next week," Bin Many Mialia said.

Chhun Oun, managing director of Tela Cambodia, also cited rising world oil prices as an explanation for local price hikes, but added that petrol prices could come down by the end of the year if other economic indicators begin to improve.

Each player in Cambodia's oil market is driven by a different set of motives in establishing their prices, said Nay Chamnap, a communications specialist at Chevron (Cambodia), in an email Wednesday.

"At Caltex, changes in the landed cost of product, foreign exchange fluctuations, freight rates, government taxes/excise and the like all have a direct effect on pricing," she wrote. "However, these are not the only determinants of price, and at the end of the day, market forces and competition play a crucial role."

Stephane Dion, managing director of Total Cambodge, wrote in an email Wednesday that the complexity of the world oil market makes valid forecasts of future pricing nearly impossible, even for seasoned experts.

"One might assume that there will be further tensions on the oil product market ... leading to higher prices," he said.

Finance Minister Keat Chhon said Wednesday that, while it could not intervene, the government urged fuel companies to keep their prices down.

"The ministry constantly calls meetings with those petroleum companies to advise them to sell gasoline according to the imported prices of gasoline, not based on the price on the international market," he said.

Petrol prices in Cambodia reached a record high of 5,800 riels per litre in August 2008. In January, prices dropped to 2,900 riels, but have climbed steadily since then.