Prime Minister Hun Sen has ordered fuel smuggling to be immediately addressed by government officials, who say lowering tariffs may be the most effective way to slow the illegal import of gasoline.
“The ministries of Finance and Commerce, and the National Petroleum Authority have to find the right medicine to treat this disease,” said Pen Thol, speaking for Hun Sen at Wednesday’s Council of Ministers meeting.
This smuggling costs the government an estimated $800,000 a month in tax revenue. It forces local fuel producers, undercut by the trade, to raise their prices.
Street prices for gasoline may decrease if the government reduces the taxes figured for fuel imported from Thailand and Vietnam, government officials said.
Though the government previously had considered such options as closing all overland routes into the country to fuel trucks, some officials said taking aim at the high gasoline tax is the only way to reduce smuggling.
Gasoline currently costs $320 per ton, according to Pen Thol. But gasoline is taxed at $314 per ton—the highest in the region, Pen Thol said. It’s higher by about $100 a ton to Thai or Vietnamese gasoline, Pen Thol said.