Prime Minister Hun Sen has stated measures to cut fuel taxes by around $30 million per year, in response to rising fuel prices in the Kingdom.
The prime minister said, “the measures [subsidies] are not enough yet, so we need to take new measures”, noting that the government’s $82.8 million in fuel subsidies over the last five months wasn’t enough to slow rising prices.
The two measures adopted are that the government will change the tax base calculation to match the international market, and lower special tax rates for regular fuel, diesel and kerosene.
There will be reduction from 35 percent to 15 percent on the special tax on fuel, while diesel will be cut from 15 percent to 5.5 percent and kerosene from 15 percent to 5 percent.
As Cambodia’s own offshore fuel reserves have not yet been tapped, the country currently purchases fuel from Vietnam, Singapore and Thailand.
Currently, the price of retail fuel in Cambodia is 4,150 riel ($1.02) per liter. This is down from 4,200 riel in the previous 10 days, as per a statement from the Ministry of Commerce.
Every 10 days, the retail fuel price cap is calculated by the Ministry of Commerce. On July 1, the price is set to be revised again which is the same date the prime minister said the new measures will be implemented.
Heading the NGO Affiliated Network for Social Accountability, San Chey expressed support for the government’s actions. Nonetheless, he said that although the move could be for the sake of popularity before the national elections, overall the measure is extremely important in helping to curb rising fuel prices in Cambodia.
According to its 2017 annual report, Singapore-based KrisEnergy plans to produce fuel from Cambodia’s offshore Block A fuel deposit next year and invest more than $30 million in the project this year.
Securing a fuel license for Block A from the Cambodian government in August last year, the energy company is allowed to draw fuel from the plot in the Gulf of Thailand. Source: PPP PWKD26062018