The BGA Cambodia team, led by Managing Director Bora Chhay, wrote an update to clients on Cambodia’s ban of Thai fuel imports.

Context

  • Prime Minister Hun Manet announced the embargo of all fuel imports from Thailand on his official Facebook page June 22. Manet assured the public that fuel and gas distribution companies in Cambodia have the capacity to source sufficient fuel and gas from alternative supply sources, not only to cover one-month of immediate needs but to sustainably meet domestic demand well into the future.
  • According to the American Chamber of Commerce in Cambodia’s President Casey Barnett, Thailand and Vietnam were Cambodia’s top fuel suppliers in 2024, each accounting for 29 percent of total imports ($1.1 billion each), followed by Singapore (13 percent, $514 million) and Indonesia (11 percent, $421 million). Other countries collectively accounted for the remaining 18 percent ($692 million).
  • The Ministry of Mines and Energy confirmed that Cambodia has sufficient reserves to meet domestic demand, emphasizing that local fuel suppliers are well-positioned to diversify sourcing from other countries, ensuring uninterrupted supply and national energy security.

Significance

  • Cambodia is urging Thailand to resume normal border operations or face further restrictions on Thai imports, advocating for local alternatives and sourcing from other countries. Bilateral trade is estimated at around $5 billion, with Cambodia importing approximately $4 billion from Thailand. The Ministry of Industry, Science, Technology and Innovation of Cambodia sees this as a strategic opportunity to strengthen local production.
  • Hun Manet reaffirmed that Cambodia’s border checkpoints that closed in response to Thailand’s unilateral actions will remain permanently shut unless Thailand reopens all crossings simultaneously. He said if Thailand reopens all checkpoints, Cambodia will reciprocate within five hours.

Implications

  • The current situation opens investment opportunities for local and other foreign energy companies to scale up operations and expand their market presence in Cambodia. Energy exporters from regional petroleum refineries, especially in Singapore, stand to benefit from this shift, with the potential to boost their export share to Cambodia significantly. In the context of domestic consumption, energy companies that have strong distribution networks and customer outreach are expected to have a competitive edge and could benefit from a large increase in sales volume.
  • Although Cambodia views the situation as an opportunity to boost domestic production, businesses are advised to activate contingency plans to mitigate short- and medium-term disruptions. This includes reassessing supply chains, sourcing locally or from alternative countries, modeling the impact of tariffs or increased costs and adjusting pricing strategies. Companies should also maintain communication with government officials and local stakeholders and stay updated on official guidance to ensure operational and employee safety.

We will continue to keep you updated on developments in Cambodia as they occur. If you have any comments or questions, please contact BGA Cambodia Managing Director Bora Chhayat bchhay@bowergroupasia.com.

Best regards,

BGA Cambodia Team

A small ginko leaf

Managing Director

Bora leads BGA’s practice in Cambodia. He is a highly regarded government affairs and public policy expert who helps clients resolve business issues, navigate regulatory and legal challenges, expand operations, explore new investment opportunities and enter Cambodia’s market.  Prior to joining BGA, Bora served for five years as a fast-moving consumer goods (FMCG) corporate and regulatory affairs professional. In this role, he helped transform his company’s government relations and corporate affairs unit into a more effective business-driven group. Notwithstanding Cambodia’s difficult and highly regulated macro environment, Bora played a key role in developing and executing government relations and corporate affairs ... Read More