The government has reached an agreement with two foreign oil companies operating in Cambodia on a proposed fuel-price mechanism, ending a two-month deadlock that has prevented it from implementing a price ceiling on gasoline sold at petrol stations across the Kingdom.

“All [petroleum] companies, including the two multinational companies Caltex and Total, have now agreed with the proposed formula,” Commerce Ministry spokesman Ken Ratha said yesterday.

The government proposed the fuel-pricing mechanism in January after months of negotiations between state officials and oil companies aimed at establishing a fuel pricing scheme responsive to changes in global oil prices.

The proposed formula is calculated on the average Means of Platts Singapore (MOPS) benchmark, adding in taxes, VAT and local operating costs.

The mechanism would require Total, Caltex, PTT, Sokimex and Tela to keep their operating costs at or below $0.23 per litre.

Meanwhile, Savimex and BVM would be required to maintain operating costs at or below $0.18 per litre, while LHR’s limit would be $0.15.

“It took a bit of time to discuss [the mechanism] with the various ministries, and two companies – Caltex and Total – needed time to meet the minister of commerce individually to clarify their concerns, but all have now agreed with the proposal,” Ratha said.

He said a prakas on the implementation of the pricing mechanism was issued yesterday and would come into effect today.

According to the prakas, the price of petroleum will be re-calculated every 10 days, and the government will meet petroleum companies every six months to reconsider the formula’s costs and structure.

“Our concern is to ensure that when the global petroleum price fluctuates, the local price is flexible enough to reflect the global market,” Ratha said.

Yim Sovann, a spokesman of the opposition CNRP, said the mechanism has taken far too long to accomplish, adding that conflicts of interest and a lack of willingness to cap fuel prices were likely causes of the delay.

“To simply set a pricing mechanism does not take a year to do. It’s really not that complicated,” he said. “The question is whether or not they want to.”