Pump prices seen up on conflicts, sanctions

Fuel prices are expected to climb again next week, the third straight week of increases, as global supply concerns continue to push up oil markets.

Based on four days of trading in the Mean of Platts Singapore (MOPS) and estimated relevant expenses, the Department of Energy’s Oil Industry Management Bureau (OIMB) projected that gasoline could rise by about P1.00 per liter, diesel by P1.40, and kerosene by P0.80.

DOE OIMB Assistant Director Rodela Romero said in a text message on Friday that the upward movement was driven by geopolitical and supply concerns. 

She cited a $1 uptick in oil prices after new US sanctions on Iran’s oil revenues, the suspension of exports by Saudi Aramco and Iraq’s SOMO to an Indian refinery under European Union sanctions, and escalating airstrikes in Russia and Ukraine.

The final price adjustments will be announced by oil companies on Monday morning and will take effect the following day, Tuesday.

Meanwhile, Jetti Petroleum, Inc. President Leo Bellas estimated that diesel could increase by around P1.30 to P1.50 per liter, and gasoline by P1.00 to P1.20 next week.

“Oil prices have increased on worries of supply disruptions after Russian oil flows dropped significantly as the country’s oil processing facilities suffered serious damage from Ukrainian attacks,” Bellas said. 

“Concerns over possible tighter supply from fresh US sanctions targeting Iran and initial expectations that OPEC+ will not change production output have also supported prices.”

Bellas added that while traders initially expected OPEC+ to maintain production levels, speculation over a potential output hike in October has pressured prices due to concerns about oversupply. He also noted that doubts about US demand growth and the sensitivity of refined fuel supply to trade disruptions could continue to weigh on the market.

Gasoline and kerosene rose by P0.70 per liter this week, while diesel increased by P1.00 due to supply jitters and geopolitical tensions that kept oil markets on edge.