Cambodian Journalists Alliance Association

Rising gasoline price adds burden for those already struggling from pandemic fallout

Motorists drive past a gasoline station in Phnom Penh, July 19, 2021. CamboJA/ Pring Samrang
Motorists drive past a gasoline station in Phnom Penh, July 19, 2021. CamboJA/ Pring Samrang

As the price of gasoline in Cambodia continues to rise, lower income Cambodians already hit hard economically by the pandemic are facing a financial crisis.

Ministry of Commerce figures show the current retail price is 4,100 riel per liter of regular gasoline and​ 3,650 riel for diesel. The ministry does not include premium, or super, fuel prices but at petrol stations it is averaging about 4,600 riel per liter. For the first two weeks of June, by comparison, gasoline sold at 3,800 riel, and diesel sold at 3,450 riel.

Oil is trading on international markets at between $69 and $71 a barrel, sending gas prices surging across the globe.

Chheng Meak, 68, has worked as a motodop in Phnom Penh for many years and before the pandemic managed to support his family without difficulty. Between the coronavirus and gas prices, however, he said his daily income has plummeted.

“Before the COVID-19 pandemic, I could earn $5 to $7 a day. It was not that much money, but it was enough to support my daily expenses,” he said. “But now, I earn around $1.50 a day. Sometimes I have no income at all because there are not many customers due to the fear of COVID-19.”

Sitting on his motorbike while waiting for customers on a Phnom Penh street, motodop Chhoun Thy said the rising price of gasoline has had a big impact on him and other informal workers.

“I don’t even think of supporting my family, with this current income I probably can afford only my three meals each day [and nothing more],” he said. “I don’t expect that the price will fall down in the future, and it will affect our living more badly.”

Seang Thay, spokesman of the Ministry of Commerce told CamboJA that all petroleum used in Cambodia is imported from abroad, meaning the retail gasoline price is affected by international fluctuation — despite government subsidies.

“In order to alleviate the hardships of the people, the government has decided to reduce the tax by two cents per liter of gasoline and the petroleum companies also helped to reduce the price by two cents per liter of gasoline as well,” he said. “So, the current retail price is already reduced by 4 cents per liter.”

But Vorn Pao, executive director of Independent Democracy of Informal Economy Association, said he believed more could be done to lower import tariffs, thus reducing the domestic price.

“The international fuel price is not the main factor that causes the retail gasoline price to jump up, but the excessive tariff does. And the government has an essential role to play as a coordinator in discussing with all petroleum company owners to reduce its price to a lower level by decreasing the importing taxation,” he said.

Rising gas prices has put further strain on informal workers, who have already struggled financially during the pandemic, he said.

“Most informal workers, especially motor taxi drivers and small business owners are now facing falling income and owe debt. The rising gasoline price will cause more financial difficulties,” he said.

After decades of exploration of Cambodia’s offshore oil and gas resources, the country extracted its first crude oil from the Gulf of Thailand in December 2020. But the nascent sector is facing uncertainty as developer KrisEnergy began winding up its operations after just six months following lower-than-expected output.