Rising diesel costs hit food production, supply chains

Rising diesel prices are starting to weigh on local food production and distribution, with businesses reporting higher costs across supply chains.

Jose Eldie Domingo, general manager of Bakers PH in Laoag City, said fuel hikes are already affecting operations, beginning with the sourcing of raw materials as suppliers pass on increased transport costs.

“Raw materials cannot reach our production area without transport, so suppliers have already added diesel charges to their pricing,” Domingo said. “At the same time, our own delivery operations are also affected.”

He said diesel prices have risen by nearly 50 percent, driving up both inbound and outbound logistics costs. Despite this, the company has avoided sharp price increases, opting for gradual adjustments.

“We cannot suddenly impose large increases. The company is absorbing a significant portion of the cost to ensure our products remain affordable,” he said.

Instead of cutting jobs or reducing output, the company has implemented operational changes to manage expenses, including adjusting employee work schedules from as early as 3:00–4:00 a.m. to 5:00–6:00 a.m.

Domingo said the shift has helped reduce electricity use and ease the burden on workers.

The company has also introduced cost-saving measures such as allowing employees to hitch rides on delivery vehicles and maintaining product discounts for staff. Fuel allowances for workers using private vehicles are also being considered for expansion.

Despite the adjustments, Domingo said production, particularly of staple goods like fresh bread, remains stable.

He added that while fuel price increases are beyond the company’s control, efforts are being made to balance operational sustainability with consumer protection.

“As much as possible, we absorb the costs so that the burden on our customers remains minimal,” he said.