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Cheers Over Lower Prices at the Pump

Chea Vannak / Khmer Times Share:
Residents drive to a gas station in Phnom Penh. The drop in the price of gasoline and diesel has been cheered by low-income citizens. KT/ Mai Vireak

The drop in the price of gasoline and diesel, following new pricing regulations introduced last week, has been especially cheered by people whose incomes are low.
The new pricing regulations – based on a formula from the Commerce Ministry – are legally binding on all retail outlets and set a ceiling for prices.
Moto taxi driver Sim Bora from Chamkar Doung in Duong Kar district said he was happy to see the drop in prices, which he said made a big difference to him personally. “I did see that the price has fallen. Every little bit helps. It is better now than when the price was over 3,000 riel [per liter].”
The previously higher prices made it difficult for him to earn much money, Mr. Bora said. “When it was higher, I had difficulty setting a price for my passengers and making some money myself. But now that it’s lower, I have more chance of making money.”
Bal Sotheary, a high school teacher in Kandal province’s Takhmao city, said life will be easier for people with low incomes like teachers and people who run small businesses with gasoline prices dropping to 2,500 to 3,000 riel ($0.62 to $0.75) per liter. “The price is still high for us because we don’t earn as much as others and we have to closely watch our spending, so it is good to see the prices come down,” Mrs. Sotheary said.
The Ministry of Commerce  announced on Monday that the price of premium gasoline would drop from 3,650 riel to 3,150 riel per liter, regular gasoline would go from 3,350 riel to 3,050 riel and dissel from 3,100 to 2,700 riel.
Sang Banh Vireak, a worker at a private firm in Phnom Penh, said he hopes the prices will remain stable. “I’m afraid that it will be implemented just for a short period and it will rise again to more than the previous price,” he said. The intervention by the Commerce Ministry came after complaints that the international oil prices had dropped but prices at the pump in Cambodia had not. Many gasoline station owners had ignored requests from the ministry to drop their prices as international prices for oil plummeted.
Bin Many Mialia, the deputy managing director of PTT’s (Cambodia) Commercial Marketing and Corporate Affairs, said the ministry was only responding to falls in the international oil market. “Oil companies have to respect the Cambodian government’s policy. It is the law,” he said.
He added that firms and ministries have difficulty setting retail prices because the price goes up and down. “Every 10 days, the ministry will set new prices based on the international market. We will know at that time whether it will go up or down, depending on changes in international markets. “If we see the premium cost going up, firms will set their prices accordingly,” Mr. Mialia said.
The Ministry of Commerce will give price updates every 10 days after following prices in international markets. The dates to calculate the prices are scheduled to take place on the first, 11th and 20th of each month, according a minstry statement. The ministry will fine any gasoline stations $1,000 if they charge more than the set price.
Chan Sophal, the director of the Center of Policy Studies, said it is right for the government to intervene and he welcomed the ministry’s move to set new prices every 10 days. “The oil price in international markets changes irregularly and quite often,” Mr. Sophal said. “So it will be good to keep the price updates and timely.”

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