AKP Phnom Penh, April 13, 2026 --

The Royal Government of Cambodia has unveiled a comprehensive package of fiscal interventions and social support measures to alleviate the rising cost of living as the nation begins its traditional New Year celebrations amid global economic volatility.

Royal Government spokesperson H.E. Pen Bona on Monday detailed a strategy centred on aggressive fuel subsidies and tax waivers designed to shield households from the dual impact of regional border tensions and a global energy crisis triggered by Middle East instability.

To stabilise domestic prices, the Royal Government has moved to absorb the brunt of global price hikes through direct subsidies and a dramatic overhaul of the energy tax regime.

Under the current framework, the state provides a baseline subsidy of US$6.5 cents per litre. A "trigger" mechanism adds a further 1 cent per liter should global gasoline prices exceed US$90 per barrel or diesel surpass US$100.

Complementing these subsidies are significant tax cuts: Import Duties: Reduced to zero percent for all fuel; Special Taxes: Gasoline levies slashed from 30 percent to 15 percent; diesel taxes eliminated entirely; Value-Added Tax (VAT): Gasoline VAT lowered from 10 percent to 4 percent, while diesel is now exempt.

According to officials, these measures result in a monthly revenue loss of approximately US$50 million. In the power sector, state utility Electricité du Cambodge has absorbed US$36 million in losses to freeze electricity tariffs, while simultaneously lowering import taxes on electric vehicles to incentivize long-term energy shifts.

To facilitate the annual exodus from the capital, the Royal Government has deployed 600 public buses to provide free transport between Phnom Penh and the provinces for a six-day period (April 12 to 17). The free service also extends to all transit within the capital city.

The initiative aims to ensure that workers—many of whom are facing inflationary pressures—can return to their hometowns without the burden of spiked holiday travel costs. 

To further stimulate the festive economy, the Royal Government authorised early salary disbursements and holiday bonuses for all civil servants and members of the armed forces.

The spokesperson emphasised that the scale of the interventions reflects a prioritisation of "social equity over revenue," noting that Cambodia’s decades of relative stability provided the fiscal space necessary to implement such costly measures.

Extending official New Year greetings, H.E. Pen Bona wished the public prosperity and the "four Buddhist blessings" of longevity, nobility, health, and strength.

By K. Rithy Reak