Transport Firms Urged to Pass on Fuel Savings

With local gasoline companies already bowing to government pressure to discount prices at the pump to reflect the global drop in oil prices, Commerce Minister Sun Chanthol on Tuesday urged transport companies to pass on the savings.

The plummeting price of oil has the potential to cut down on freight fees that are among the steepest in the region, but trucking firms are not playing ball, the minister said.

“We have met with gas distribution companies and they have reduced the prices of their gas. As a result, other companies are wondering why transportation costs have not been likewise reduced,” Mr. Chanthol said during a meeting with representatives of the Cambodia Trucking Association (CAMTA) at the Commerce Ministry.

“That’s the reason for our meeting today—to have a discussion and request that the transportation companies review their prices to match lower gas and electricity costs,” he said.

Mr. Chanthol stressed that as Cambodia was a free market, the government could not force those in the private sector to reduce their fees, but was rather asking that companies assist the state in bringing down the overall cost of doing business in the country.

CAMTA’s executive director, Sok Chheang, said trucking firms had already dropped their prices, claiming the transportation fee for a freight truck on a two-way journey between Sihanoukville to Phnom Penh was $50 less than it was last year.

“Previously, the revenue was $480, but now, it’s just $430, which means the transportation costs have been reduced $50 for two-way transportation,” he said, adding that further reductions were not viable.

However, pointing to documents containing a cost analysis prepared by CAMTA, Mr. Chanthol said the actual drop in diesel prices for the round-trip drive to Sihanoukville was $290 last year, compared to $184 currently—a 38 percent drop.

“So, it means you have gained from the diesel price 38 percent, but you’ve passed [savings] to consumers of just about 10 percent,” Mr. Chanthol said.

CAMTA president Kuch Sinith said Mr. Chheang, the executive director, had made a mistake in the accounting and claimed the figures did not accurately reflect operating costs.

“The number…that Chheang has written is inaccurate because diesel is not the only direct cost for transport operators,” he said. “He did it hastily. If necessary, we will redo it.”

The meeting ended without an agreement being reached.

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