PHNOM PENH, July 21 (Xinhua) -- Cambodian Prime Minister Hun Manet said Tuesday that his government has subsidized 50 to 60 million U.S. dollars monthly to cushion the impact of war-driven fuel price hikes in the Middle East.
Speaking at a university graduation ceremony in Siem Reap province, which was broadcast live on state-run TVK, Hun Manet said that during this challenging economic period, the government must increase spending to counter inflation.
"The government loses 50 to 60 million dollars monthly by cutting taxes on fuel and electrical appliances to ease the financial burden on consumers," he said.
Retail fuel prices in Cambodia rose again on Tuesday as tensions in the Middle East escalated, the Ministry of Commerce said.
In an announcement, the ministry said a liter of regular gasoline is priced at 4,300 riels (1.06 dollars) from this Tuesday until further notice, up 10 percent from 3,900 riels (0.96 dollars) a week ago.
Diesel costs 4,950 riels (1.22 dollars) per liter, up 15 percent from 4,300 riels (1.06 dollars), it added.
Thong Mengdavid, deputy director of the China-ASEAN Studies Center at the Cambodia University of Technology and Science, said that rising fuel prices inflate transportation and production costs.
"This drives inflation and erodes purchasing power, particularly for food and agricultural products," he told Xinhua.
"Moving forward, the government's policy of subsidizing retail fuel through customs duty waivers and VAT reductions remains a crucial fiscal cushion for long-term economic resilience and growth," he added.
The Southeast Asian country relies entirely on imported petroleum and diesel because its offshore oil reserves remain unexploited. ■
