Gasoline and diesel prices surged by around 10 percent at the pump Monday, as local economists and petroleum experts warned that fuel prices will likely continue to increase.
Prices at Phnom Penh’s Chevron (formerly Caltex), Sokimex, Total and Tela stations jumped to 4,450 riel Monday from 4,050 riel per liter for “premium” gasoline. Diesel prices also increased from 3,300 riel to 3,650 riel per liter.
Analysts cited strong global demand, geopolitical concerns and Cambodian taxes for the high prices that consumers currently face.
Sok Kong, president of Cambodian petroleum company Sokimex, blamed the price increase on the world market, which has pushed crude oil prices to nearly $100 per barrel.
“In the last three months, the price of crude oil internationally has sharply increased,” he said. “It’s amazing.”
He added that there seem to be no signs of the situation abating.
Petroleum analyst Bin May Mialia said that government taxes—which have not increased—represent a significant portion of the price consumers pay.
“For one liter of gasoline, you are taxed 1,270 riel and for diesel you pay 715 riel per liter,” he said.
He added that he didn’t know whether the price of petroleum would decline in the near future, but “it would help if the government would reduce taxes and people used less [gasoline].”
Men Den, director of the Petroleum Exploration and Production Division for the Cambodian National Petroleum Authority, said Cambodia would not join the ranks of other nations using subsidies to stabilize petroleum prices.
Men Den said that when oil prices go up they tend to stay up, adding that Cambodia’s as yet untapped offshore oil reserves are the best chance for bringing down costs.
“We are a country that imports 100 percent of our petroleum,” he said. “If you want the price of gasoline down, we’ll have to produce it ourselves.”
He added that Cambodia should invest in alternative energy sources such as solar power and bio-mass.
Economist Sok Sina said the price of petroleum would have an impact on GDP, adding that geopolitics has played a role in rising oil prices, which he believes are contributing to high pump prices here.
“The recent matter of French President [Nicolas] Sarkozy taking measures against Iran’s government has led to a price move,” Sok Sina said, referring to Sarkozy’s increasingly tough stance concerning the oil-producing country’s nuclear ambitions.
“Based on current world politics, I don’t see any sign of the price of world crude declining,” he said. “Poor countries like Cambodia will face more challenges and negative impacts due to the current price of petroleum.”
One of these challenges would be an oil-influenced increase in operating costs for Cambodian businesses that could deter investors and will trickle down to consumers in the form of higher prices, Sok Sina said.
Indeed, consumers are already feeling the sting. Motorbike taxi driver Pen Hean Ly, 29, grumbled about the price jump at a Chevron filling station on Monivong Boulevard.
“I can only fill one liter, instead of two,” he said. “I make 10,000 to 15,000 riel per day—how can I afford two liters?”