Managing gasoline prices

The management of gasoline prices in Cambodia could serve as a good case study to replicate in the price management of other utility items, argues Sim Vireak.

Gasoline is among the most basic utilities that affect the daily livelihood of people. While the price of gasoline in Cambodia is similar to other countries, the impact is different considering the income gap in the country.

The common complaint is that when the international price of oil increases, gasoline price in Cambodia also increases in tandem. However, when the price of oil falls in global markets, the gasoline price in Cambodia remains unchanged. So the gasoline price in Cambodia seems to be on an upward bias.

Efforts to manage the gasoline price in the country is not new and it should be understood that such an effort is not confined within the dynamism of populism or electoral campaigns.

Rather it is a question of how the government could make the public perceive economic development, which is not simply about growth but more about how people feel that there is an improvement in their livelihoods. If income increases and the price of utilities also increases, the people’s burden would remain the same.

When adopting a market economy, the government cannot fix prices. The retail price of petrol relies on price fluctuations in the global market, as Cambodia depends mainly on petroleum imports. Cambodia currently purchases petroleum from Vietnam, Singapore and Thailand.

In managing prices, cooperation from the private sector is a must.

Despite many efforts, and it was not until March 2016 that a proper formula was created through a joint prakas or directive by the Ministry of Commerce, Ministry of Economy and Finance, and Ministry of Energy and Mines.

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