Government Pressed as Gasoline Prices Soar

The government has come under renewed pressure to offer relief for rising gasoline prices. Photo by Chhum Chantha

Citizens ask for the help of the rising gasoline prices while the government cannot control the price

PHNOM PENH--The government has come under renewed pressure to offer relief for rising gasoline prices.

Stories of hardship are mounting as the retail price of regular gasoline climbs to 4,800 riel or roughly $1.17 per liter, with premium gasoline at 5,350 riel, about $1.31,  and diesel at  4,500 riel or $1.10.

However, Seng Thai, a spokesman for the Commerce Ministry, said the ministry does not set the retail price. It only uses a formula to calculate the daily price based on the international market price.

The price, set every 15 days, is also agreed between the importing companies and the relevant ministry.

“So far, Prime Minister Hun Sen has helped to cut two cents from each liter of gasoline and the companies have helped reduce it by two cents to make the retail price lower than the calculated figure,” Thai said.

Nget Von, a teacher and an undergraduate student in Takeo province, said the price rise has severely affected his family life as every day he has to travel about 16 kilometers to teach students, while on weekends, he has to travel more than 70 kilometers to continue his studies in Takeo.

He has to spend about 50,000 riel or about $12.23 per week on gasoline. The costs of almost all commodities were also rising. He said he owes money to the bank and must set aside money for other expenses.

“The rising price of gasoline affects me so many ways because I both study and work. Moreover, now it’s the wedding season, which I have to spend on as well,” Von said.

“At the least, I have to spend 70,000 riel [$17.12] or more for one wedding reception. Due to our poor living conditions, we borrowed money from the bank, so I have to pay them monthly.

“So, the problem of rising gasoline prices is very challenging because we always drive motorcycles.”

Keo Tong Heng, a mechanic, said that during COVID-19 his company did not raise wages in line with rising gasoline prices. He said the biggest impact on people is low income but high costs.

He said that if the price keeps rising his income will fall sharply. He asked the government to reduce the price to help reduce the costs for citizens.

“I want the government to reduce the price to 3,500 or 3,700 riel per liter as before,” Heng said. “But if it is up to 5,000 to 6,000 riel [$1.5], I don’t have the money to refuel my motorcycles and for my daily expenses as the company does not increase the wages of their employees due to the COVID-19.” 

Vorn Pov, head of the Independent Democratic Association of Informal Economy (IDEA), said the rise in gasoline prices seriously affected workers in the informal economy, especially those transporting tourists or materials.

“When the price of gasoline goes up, so does the price of goods,” he said. “Therefore, to address this, I suggest that the government reviews import duties or sales taxes to reduce tariffs. In particular, the ministry must cooperate with all oil companies to negotiate so that they do not sell at too high prices.”

Vongsey Visoth, Secretary of State of the Ministry of Economy and Finance, said the government would not be able to reduce the tax on gasoline because it would affect revenue and the national budget to support the economy, adding that the rising gasoline price was a global issue and the government could not do anything about it.

“When the tax is reduced, the national budget will fall. The government has set a fixed value of tax and no matter how the gasoline price fluctuates, the tax can’t be changed,” he said at a public forum on Feb. 18.

Visoth said the government and the finance ministry understood the difficulties of the poor and business people, but the government lacked the income to support the millions of poor people, although $30 million had been employed to help the poor.

“This is a difficult policy choice, and in the current situation, reducing the gasoline tax is not a better option than supporting the poor and vulnerable,” he said.

Prime Minister Hun Sen on March 2 asked people to understand the price rises. The world is facing the COVID-19 crisis as the war between Russia and Ukraine has also pushed up international oil prices, he said.

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