Petrol pump prices rise on back of recent global highs

Photo by: Pha Lina

A motorbike passes through a Total service station on Monivong Boulevard in Phnom Penh displaying prices Sunday that were recently raised as oil continues to climb on world markets.

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If other companies have increased the price already, we will think of increasing the price too."
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(CAAI News Media)

Monday, 11 January 2010 15:03 Soeun Say

Petroleum firms blame international market as taxi drivers say that their businesses are quickly becoming unsustainable

PETROL pump prices increased again at the end of last week as service station operators defended the move, citing rising prices on international markets, the source of all of the Kingdom’s oil products.

Caltex, Sokimex and Total were all selling premium petrol at between 4,350 riels and 4,450 riels (US$1.04 and $1.07) per litre Sunday following price rises of about 200 riels a litre initiated on Wednesday and Thursday.

“We started to increase the price on Thursday,” Stephane Dion, managing director of Total Cambodia, said on Sunday.

“The oil price has risen because the crude oil price on international markets has increased,” he said, citing Cambodia’s dependence on international crude.

Asia gasoline hit a 15-month high in Singapore on Friday. Benchmark 92-RON gasoline rose 5.4 percent to $90.25 a barrel, the highest price since October 7, 2008, according to a report by Bloomberg.

At Asia’s biggest oil trading centre, Glencore International AG sold 50,000 barrels of 95-RON petrol to Total at $90.50 a barrel, the report said, a sign that prices are likely to continue rising in the region as oil prices recover from the lows of a year ago.

“If the international market price keeps rising, we will go along with it,” Dion said.

On Sunday, regular-grade petrol was selling for between 4,100 riels and 4,150 riels per litre compared with between 3,900 riels and 3,950 riels per litre two weeks ago.

Total’s premium brand Excellium was the highest-priced fuel on the market in Phnom Penh on Sunday at 4,450 riels per litre.

Chhun Aun, managing director of Cambodian firm Tela, said that his company will likely follow suit today.

“If other companies have increased the price already, we will think of increasing the price too on Monday, but by how much … we do not yet know,” he said, citing pricing pressures from international oil markets.

A representative from Sokimex who declined to be named said Sunday that increases in the cost of fuel in the Kingdom have become a necessity, given what is happening on markets worldwide.

Cambodia still does not produce its own oil or gas. The government is locked in talks with US-based oil giant Chevron over developing offshore Block A – the concession that is the closest to producing – but neither side has released information on discussions after the expiration in April of the firm’s previous agreement.

Officials in the government said last year that production on the concession could not be expected until around 2013 at the earliest.

There are few other domestic blocks set for imminent production, a situation that was exacerbated when the Thai government decided to put to parliament a decision on whether a framework joint-production agreement with Phnom Penh should be ripped up following a spat over Thai ex-prime minister Thaksin Shinawatra last year.

The agreement, made in 2001, was meant to be the first step on a deal that would split future energy revenues from a disputed offshore area in the Gulf of Thailand.

Meanwhile, Cambodian taxi drivers complained Sunday that their businesses are under pressure from the recent price hikes.

“Since early January, oil prices have been on the rise every day,” said Keo Sarat, a 38-year-old taxi driver based in Phnom Penh. “I dare not continue my business because I never make a profit.”

He said he hopes prices stabilise, and he added that many taxi and tuk-tuk drivers have started to complain of the recent escalation in fuel costs.

“I earn only 20,000 riels per day,” said 44-year-old tuk-tuk driver Heng Vichet, also based in the capital. “That is not even enough to cover petrol expenses.”