In brief
In Pursat province, Prime Minister Hun Manet announced a state‑run subsidy program exceeding US$600 million to curb soaring fuel and electricity prices, citing Middle East conflicts as a catalyst. The package includes electricity tariff cuts, import duty waivers on oil and gas, and reduced tariffs on electric vehicles and related devices. Economists point to the measures as essential for maintaining inflation control and protecting households and businesses.
On November 5, 2026, Prime Minister Hun Manet stood in Pursat province amidst a visit to distribute rice seeds and relief items to families affected by recent flooding, and announced that the Cambodian government had injected more than US$600 million in subsidies to shield the domestic economy from the sharp rise in global fuel and electricity prices that has been driven by conflicts in the Middle East.
The financing fuels a package that includes direct electricity tariff cuts, lower import duties on oil and gas, and reduced tariffs on electric vehicles, plug‑in hybrids, electric stoves and solar‑powered devices. The subsidies are intended to curb inflation, protect household purchasing power and stabilize the business environment as gasoline and diesel prices reach a 31 % and 47 % surge respectively over February’s levels.
To date, we have subsidized more than 600 million dollars to curb rising fuel costs and stabilize electricity prices,
he told viewers during a live‑televised address on the state‑run TVK network. He added that the subsidy programs will “remain in place for as long as global fuel markets remain elevated.”
Data released by the Ministry of Commerce indicated that the retail price of regular gasoline had risen to 5,050 riels (about US$1.24) per liter, while diesel climbed to 5,650 riels per liter, marking a 46.7 % jump. Cambodia, which relies entirely on imported petroleum, faces a heightened burden on the transport and production sectors as a result of these price hikes.
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,
said Thong Mengdavid, deputy director of the China‑ASEAN Studies Center at Cambodia University of Technology and Science, referencing the subsidy strategy’s role as a fiscal cushion for long‑term economic resilience and growth. He further noted that “low‑ and middle‑income households, informal workers, and small‑ and medium‑sized enterprises bear the brunt of the crisis, facing steeper living and operating costs while possessing limited financial buffers.”
With the ongoing conflict cycles in the Middle East continuing to pressure global crude oil supplies, the Cambodian government is signalling that it will keep these subsidies active so long as international markets remain elevated, underscoring its commitment to mitigate the inflationary impact of energy price shocks on the population and businesses alike.
