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Caltex to expand its stake in Cambodia despite drawbacks

US-based petroleum giant Caltex aims to expand its growing presence in Cambodia despite its business suffering from regular gasoline smuggling, the Caltex country director said.

"There appears to be a fair amount of fuel that is sold in the marketplace here through unauthorized channels," Wayne Klahs said late Monday after meeting with employees. Klahs, who is based in Bangkok, also handles Thailand and Laos for Caltex.

Klahs said the company will raise the issue of smuggling with the government. "We hope to raise the focus on it," Klahs said.

Large Western oil companies operating in Cambodia such as Caltex, Total and Shell have complained for years that well-connected Cambodians import gasoline illegally to avoid paying tax, giving some retailers an advantage over legal vendors.

Government officials have said they are taking measures to crack down on the illegal import of gasoline, noting that the cash-strapped state needs the tax revenue. Police officials admit that gasoline regularly moves into Cambodia tax free across land borders with Thailand and floods the northwestern part of the country.
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