Sinking Dollar Spurs Painful Rise of Fuel Cost in Cambodia

The price of gasoline at the pump in Phnom Penh rose last week as the international price of crude oil rallied under the effects of a weakening dollar and a rise in demand for crude oil in Europe and the US, analysts said yesterday.

The price of premium petrol at Caltex, Sokimex and Total gas stations in Phnom Penh ranged from 4,100 riel and 4,450 riel yesterday up 150 riel compared to last Wednesday.

“If the price of the US dollar is weak, the price of gasoline goes up,” according to Nay Chamnap, a spokeswoman at Chevron Corp, the US parent company of the Caltex chain of filling stations.

Because crude oil is priced in dollars, the price of the commodity goes up when the dollar loses value.

The weakening dollar, which fell yesterday to a three-week low of $1.45 against the euro, and rising fuel demand in China, helped push the price of a barrel of crude above $83, a 14-percent rise since mid-December, the Reuters and Bloomberg news agencies reported. Oil nevertheless remains 43 percent below its July 2008 high of $147 per barrel.

Ms Chamnap also said that higher levels of demand for crude oil in Europe and the US, where there is currently very cold weather, had also caused the price of crude oil to increase recently.

“The timing of our pump price adjustments is dependent on a combination of several factors including…currency exchange rates, inventory levels, freight rates [and] market demand,” she said in an e-mail.

One official at Sokimex, who wished to remain anonymous, said that Cambodia’s dependency on international oil imports made it vulnerable to a rise in prices on global markets.

Government officials say the extraction of oil and gas from Cambodian reserves in the Gulf of Thailand could relieve some of the price pressure on consumers at the pump.

The rise in the oil price is putting pressure on Cambodian motorists, a motor taxi driver said yesterday.

“I find it hard to make a profit from by business when the price of gasoline goes up,” said Ros Saroeun, 45, a motor taxi driver in Phnom Penh. “My clients never take care of the increase in gasoline prices.”

 

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