No letup in rise of fuel prices

Pump prices will rise again this morning, extending a string of fuel hikes since the start of the year and further squeezing motorists, commuters, and transport operators.

In separate advisories yesterday, fuel retailers confirmed that gasoline and kerosene prices increased by P0.60 per liter, while diesel costs rose by P1 per liter, citing tightening global supply, geopolitical tensions, and seasonal demand pressures.

Jetti Petroleum Inc. president Leo Bellas said diesel prices remain supported by supply disruptions and geopolitical tensions, particularly in the Middle East and Europe.

Weather-related supply and demand issues

“Diesel price has found support from weather-related supply and demand issues, as well as the continued geopolitical tension in the Middle East that directly affects supply dynamics, at a time when Europe is moving away from Russian-origin supplies. The likelihood of limited diesel exports from China, largely due to expected higher domestic demand during the Lunar New Year festivities, has also offered near-term price support,” he said.

Gasoline fundamentals remain weak, but prices are being propped up by rising crude prices and geopolitical risks.

“Weak fundamentals have kept gasoline prices softer. However, fast-rising crude prices spurred by a potential United States (US) attack on Iran and potentially lower outflows from China over its upcoming Lunar New Year festivities have put a floor on prices. The possible domestic price increase of gasoline can be attributed to the effects of a higher premium due to geopolitical tensions,” Bellas said.

Volatile prices due to shifting US-Iran tensions

He added that oil prices have been volatile due to shifting US-Iran tension and fears of supply disruptions, while OPEC+ output restraint and falling US crude and diesel inventories have kept prices supported.

Meanwhile, Department of Energy Oil Industry Management Bureau Director Rodela Romero said price movements were driven by shifting US-Iran tensions, noting that comments that Iran was “seriously talking” with Washington briefly eased the geopolitical risk premium, while earlier strains near the Strait of Hormuz had pushed prices up.

She added that expectations of ample supply from the US and other non-OPEC sources, as well as softer heating fuel demand due to milder weather, also weighed on prices.

Last week, gasoline prices rose by P0.80 per liter, diesel by P1.60 per liter, and kerosene by P1.10 per liter.