At the heart of Cambodia’s action on November 5, the government announced it had allocated more than US$600 million in subsidies to stem soaring fuel and electricity costs triggered by global energy spikes linked to Middle East conflicts. The announcement came during a live‑televised address on state‑run TVK, while Prime Minister Hun Manet was distributing rice seeds and relief items to families in Pursat province recently battered by flooding.
The subsidies will be delivered through a blend of direct electricity tariff cuts, duty waivers on oil, gas and electric vehicles, and broad tax reductions, Xinhua reported. The prime minister stressed that the measures would remain operational for as long as international markets keep prices high.
Prime Minister Hun Manet said:
To date, we have subsidized more than 600 million dollars to curb rising fuel costs and stabilize electricity prices.
The package covers lower import duties on oil and gas, reduced tariffs on plug‑in hybrid and electric vehicles, as well as on electric stoves and solar‑powered devices, and targeted reductions in the value‑added tax on energy‑related imports, according to the official. These steps are aimed at bluntening the cost impact on both households and businesses.
Official data from the Ministry of Commerce highlighted that the retail price of regular gasoline stood at 5,050 riels (about US$1.24) per liter on Thursday—a 31 % rise from the pre‑conflict level in February. Diesel prices climbed to 5,650 riels per liter, a 46.7 % increase. These hikes have amplified transportation and production costs across the economy.
Thong Mengdavid, deputy director of the China‑ASEAN Studies Center at the Cambodia University of Technology and Science, explained the strategy: “Fuel price hikes elevate transportation and production costs, driving up inflation and eroding purchasing power, particularly for food and agricultural products. This ultimately slows down broader economic activity.” He added that the subsidy strategy provides essential fiscal cushioning for long‑term resilience and growth. Low‑ and middle‑income households, informal workers, and small‑ and medium‑sized enterprises bear the brunt of the crisis, he said.
Experts note that Cambodia’s total dependence on imported petroleum and diesel—its domestic offshore oil reserves remain unexploited—makes the country especially vulnerable to global market swings. The subsidy package aims to mitigate that vulnerability by shielding consumers and producers from imported price shocks.
Hun Manet assured that the subsidies would stay in force until international markets return to baseline levels, offering a form of temporary relief. By stabilizing electricity prices and dampening fuel inflation, the government hopes to preserve purchasing power, curb rising inflation, and sustain broader economic activity during this volatile period.
