Cambodia’s Hun Sen Urges Gas Stations to Cut Prices Amid Oil Declines

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Cambodia’s Prime Minister Hun Sen on Monday urged domestic fuel pump operators to lower the cost of their gasoline amid a general decline in global oil prices, as the government seeks to bring cheaper energy to the country.

The plea came as Hun Sen inaugurated Cambodia’s largest hydropower dam—a Chinese built project which will help supply electricity to the country’s villages and factories.

Speaking in a nationally broadcast radio address, the prime minister said fuel station operators in Cambodia can no longer claim that global costs are forcing them to maintain high prices at the pump, following a months-long slump in the value of oil worldwide.

“Local companies, please consider lowering your gasoline prices—please don’t try to make too much of a profit,” he said at the opening ceremony in southwest Cambodia’s Koh Kong province.

Station operators have said they have yet to make back the money spent purchasing fuel during the time of high global oil prices, but Hun Sen dismissed their claims.

He said that based on current global oil prices, the cost per liter (one-fourth of a gallon) of gasoline in Cambodia should be only 4,000 riel (U.S. $0.98), though no company has been willing to offer prices so low.

In October, a liter of gasoline in Cambodia cost between 5,600 and 5,800 riel (U.S. $1.37 and $1.41), but recently the price has dropped to between 4,200 and 4,500 riel (U.S. $1.02 and $1.10).

According to Reuters news agency, oil slumped five percent to near six-year lows on Monday, worsening a months-long decline, after lenders cut short-term price forecasts and Gulf producers gave no indication they would reduce output.

Cambodia’s Ministry of Commerce and Economy has held regular meetings in recent months in a bid to incentivize domestic operators to reduce their gasoline prices to mirror declining oil value.

Last week, the Phnom Penh Post quoted Hiroshi Suzuki, chief economist at Business Research Institute for Cambodia, as saying that because international transaction of oil is usually made through long-term contracts “the price movement at gas stations has some time lag.”

“However, even in Cambodia, the gasoline price will be decreasing,” he said.

Dam opened

Hun Sen was joined Monday by the Chinese ambassador at the opening of the 338-megawatt Stung Russey Chrum Krom hydropower project in Koh Kong, which was developed by China’s state-owned Huadian Corp. over the past five years at an estimated cost of U.S. $500 million.

But while the Chinese-funded dam is expected to bring power to the country, where only one-quarter of households have access to reliable electricity, activists have railed against the project, warning of the environmental costs from such ventures.

Hun Sen on Monday defended the government’s decision to use dams to bring power to the country, saying that while the project would “affect some forests … we are solving more problems that we are causing to the environment,” according to a report by Agence France-Presse.

Environmental groups say the government has not done enough to assess the impact of the project, as well as another Chinese-funded 246-megawatt dam—the U.S. $540 million Stung Tatay project in Koh Kong—which is set to open later this year.

They say the 1,600 hectares (4,000 acres) that will be cleared or flooded to make way for the two projects could destroy the habitats of some 200 species of animals, birds, fish and reptiles, and upset area ecosystems.

The government has plans to open nine dams, including several funded by China, by 2019.

Reported by An Sithav for RFA’s Khmer Service. Translated by Samean Yun. Written in English by Joshua Lipes.

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