The Department of Energy (DOE) has dispelled concerns that the escalating tension between Israel and Iran would lead to an unprecedented surge in the prices of fuel sold at the local pumps.

"If we look at what happened, the average of the previous week would be around $89 per barrel. Last week, the average was around $90 per barrel. It has not spiked up so high but it's consistently increasing, so there is no actual disturbance in the supply," Department of Energy - Oil Industry Management Bureau (DOE-OIMB) Director Rino Abad said in an interview on Monday.

Abad estimated that if the global price of oil remains at $90 per barrel, the local prevailing price of gasoline is likely to be around P66 per liter, P64 per liter for diesel, and P76 per liter for kerosene.

He also explained that every $2 increase in the cost of fuel per barrel would roughly translate to an increase of P1 per liter of fuel sold at local pumps.

For instance, if international prices rise to $92 per barrel, the P66 per liter price of gasoline would increase to P67 per liter.

"Any disruption in supply and demand would be primarily brought by the production cut of oil-producing countries, not necessarily about the Israel-Iran conflict. Least of the last resort would be a production cut from Iran but they would not do that because they need the revenue," Abad said.

Iran currently produces approximately 3 to 4 million barrels of oil per day.

However, Abad noted that it is unlikely that the country will halt its production because it consumes approximately half of it domestically.

He added that if Iran were to reduce its production by at least 2 million barrels per day, it would only represent approximately 2 percent of the global oil supply.

Another price hike set

In separate advisories this morning, oil companies announced that diesel will increase by 95 centavos per liter and gasoline by 40 centavos per liter.

The price of kerosene will also go up by 85 centavos per liter.

The price adjustments are effective tomorrow morning.

The previous week saw gasoline prices go up by P1.10 per liter; diesel by P1.55 per liter; and kerosene by P1.40 per liter.

Oil companies adjust their prices weekly based on the movement of the Mean of Platts Singapore, which is the regional pricing benchmark adopted by the deregulated downstream oil sector.

The Philippines, being a net importer of oil, has no control over the global price movement.

Iran launched attacks against Israel late Saturday (Sunday, local time), using drones and missiles in retaliation for a supposed Israeli air strike on the Iranian consulate in Damascus, Syria.

In a statement on Monday, the Department of Foreign Affairs (DFA) urged parties to work on resolving the conflict.

"The Philippines expresses its serious concern over the increasing tensions between Israel and Iran. We urge all parties to refrain from escalating the situation and to work towards a peaceful resolution of their conflict," the DFA said.

"The Philippines has long advocated for all states to adhere to the principles of international law and the peaceful settlement of disputes," it added.