Prices at the pump set to fall, gov’t says

[geovalin]

May Kunmakara

The cost of filling up a motorbike will drop by as much as 12 per cent today after the government called on petrol retailers to fall in line with declining global oil prices.

A statement released yesterday by the Ministry of Commerce said major petrol stations Sokimex, Thailand’s PTT and BVM will drop their average prices from about $1.25 per litre to close to $1.17 per litre. Smaller petrol provider Savimex will reduce its prices on average to about $1.10 per litre, the ministry said.

“The drop in oil prices proves that the government cares for the people and private sector development,” the statement said.

Ministry spokesman Ken Ratha told the Post that the announcement follows a meeting on Wednesday led by Deputy Prime Minister Keat Chhon, with the Commerce Ministry, the Ministry of Economy and Finance and nine petrol companies operating in Cambodia.

“Based on the global oil price, we have seen that it has dropped so we held the meeting to see how much we can drop the price here,” he said.

Companies were encouraged to reduce their prices, but only on a voluntary basis, Ratha said.

“We didn’t force them, as you can see a few did not reply at the meeting as they need time to discuss it further,” he said, referring to Caltex and Total, which have not stated whether they will reduce their prices.

Bin May Mialia, a spokesman for PTT, said yesterday that global oil prices, staff costs and tax rates were all discussed at the meeting with the government on Wednesday.

“We didn’t receive any pressure from the government to drop our prices, we volunteered to decrease the price as we have to follow the current global oil price,” he said.

According to Mialia, Singapore’s refined petroleum dropped from $108.63 a barrel in September to $93.73 a barrel in October. It continued to decline and hit $89.86 a barrel on November 19, he said yesterday.

Local petrol prices were slow in responding to the global drop as PTT had a stockpile of petroleum imported from earlier in the year, Mialia said.

Heu Heng, deputy managing director of Sokimex, said his company began reducing prices on the 15th of this month in response to a global fall.

“When we had the meeting with the inter-ministries yesterday [Wednesday], we were happy to decrease further as we understand the current drop at the global market,” he said.

Kang Chandararot, president of the Cambodia Institute for Development Study, said yesterday that the government was right to intervene when it came to market staples.

“Commodities like gasoline and food are the core of [the] economy, so any government has to intervene when there is problem,” he said.

The move helps stabilise commodity prices and should pose “no threat” to competition in the private sector, he added.

The opposition Cambodia National Rescue Party president, Sam Rainsy, who has long said that local prices did not reflect the world market prices, claimed partial responsibility yesterday for the industry’s price reduction.

“I am glad to have contributed or hastened this evolution at a time when retail gasoline prices all over the world have been dropping since the beginning of 2014,” Rainsy said in an email.

Further steps are needed to prevent oil smuggling, which Rainsy said creates an unfair playing field for businesses and restricts state tax revenues.

“But consumers and the ordinary people suffer most,” he went on to say.

http://www.phnompenhpost.com/business/prices-pump-set-fall-gov%E2%80%99t-says