Prime Minister to reveal new oil policy next week

May Kunmakara / Khmer Times No Comments Share:
An employee fills the tank of a motorcycle at a Sokimex gas station in Phnom Penh. KT/Mai Vireak

With the price of oil in the international market on the rise, Prime Minister Hun Sen yesterday announced he will unveil a new policy to deal with the impact of more expensive crude on the 28th of this month.

For in depth analysis of Cambodian Business, visit Capital Cambodia
.

During a speech yesterday at a title bestowment ceremony at the Royal Academy of Cambodia, Mr Hun Sen said the current hike in the price of crude will not only hurt the country’s industry, but also everyday consumers.

“The price of oil in the international market continues to rise, and this will put upward pressure on retail prices at home,” the premier said. “Whenever OPEC freezes production, the impact in Cambodia is substantial. We need to come up with the right policies to minimise this impact.

“I mark the 28th on my calendar. This day I will announce a number of initiatives to deal with this issue,” he said.

Long Kemvichet, spokesman at the Ministry of Commerce, said his ministry has already submitted a report to Mr Hun Sen based on input collected from local oil firms which details the current situation and proposes a series of recommendations to lessen the impact of rising oil prices.

“We have analysed the situation very carefully to come up with a course of action that will minimise the impact on our people and economy.

“After meeting with big oil companies to hear their side of the story, we have submitted a report to our prime minister,” he said. Mr Kemvichet, however, refused to go into details regarding the contents of the report.

A sign shows the prices for the different types of gasoline. KT KT/Mai Vireak

He said the ministry continues to follow the government’s fuel pricing mechanism, a system that recalculates retail fuel price caps every 10 days using a formula that aims to reflect changes in global oil prices. That formula is used to calculate the price of regular gasoline and diesel. Premium, also known as ‘gold’, is excluded.

“When the Prime Minister issues new orders on the 28th, the ministry will follow them,” he added.

Bin Many Mailia, deputy managing director of PTT, a Thai state-owned oil and gas company, told Khmer Times that the hike in the value of petrol is the direct result of US’s withdrawal from the Iranian nuclear deal and its ongoing trade spat with China. He said prices will continue to rise if these conflicts remain unresolved.

Kaing Monika, deputy secretary general at the Garment Manufacturers Association in Cambodia, said the hike in the price of oil is likely to increase production costs in the textile industry by driving up the price of electricity. At the same time, more expensive oil means more expensive transportation, he added.

“The increase in oil prices will affect local trucking and international shipping costs. However, we are more concerned about the impact it will have on the lives of our workers,” he said.

“Some are concerned about the price of electricity, but fuel-based plants are less common nowadays. More and more energy in Cambodia comes from hydropower dams and coal-fired plants,” he said. According to Mr Monika, energy generated at oil-fired power plants now accounts for less than 10 percent of total energy output in the Kingdom.

“The government has also assured us that the price of electricity used for industrial purposes won’t increase,” Mr Monika said, adding that electricity prices could decrease in the near future due to the recent approval of a project to build a 60-megawatt solar power plant in Kampong Speu province.

According to the Ministry of Commerce, from June 15-21, regular gasoline in Cambodian gas stations sells for 4,200 riel per liter, while diesel retails at 4,000 riel.

Share and Like this post

Related Posts

Previous Article

General Electric dropped from Dow Jones stock index

Next Article

Riding buses made easy with new e-payment card