Concerns over a looming war in Iraq and a dearth of smuggled oil from Thailand both threaten to destabilize Cambodia’s oil market, industry chiefs said Tuesday.
Sok Kong, president of Cambodia’s largest petroleum company, Sokimex, voiced worry over the potential price hikes the twin crises could incur.
“If international market prices rise, my company will have to raise its prices to make a profit,” Sok Kong said. “We are a private company.”
The Vietnamese government announced Tuesday a rise in petroleum prices that officials say aims to protect retailers from price increases borne out of instability in the Middle East.
Sokimex has 60,000 tons of petroleum in storage at its Russei Keo district storage station—enough to supply the domestic market for about a month, Sok Kong said.
Gasoline prices remained stable at Phnom Penh filling stations Tuesday, at around 2,500 riel ($0.63) per liter. But near the Thai border, where cheap smuggled fuel normally floods the market, prices have risen from an average of 1,200 riel to 2,100 riel ($0.30 to $0.53).
Petroleum companies estimated that in late 2002 30 percent of fuel used in Cambodia was smuggled in from Thailand. But due to the Jan 29 riots, Thai border controls have tightened and the smuggled fuel has all but dried up.
“Some gas stations are buying fuel in Phnom Penh to sell in Battambang,” Sok Kong said.
Nestor Tan, country manager of Shell Cambodia Ltd, said his company should avoid any price increases as the company currently has two months’ supply of oil at its Sihanoukville storage facility.
Lack of smuggled petrol shouldn’t be a problem, either: “We set our prices on the price we pay for fuel, not the price of smuggled fuel,” Tan said.
