Ceasefire lifts hopes for cheaper fuel

Motorists may get a reprieve next week, as easing tensions in the Middle East raise the prospect of a rollback, or at least a pause, in fuel price hikes.

Jetti Petroleum Inc. President Leo Bellas said Wednesday that domestic pump prices are now on track to reverse earlier projections of an increase, following a sharp cooling in global oil benchmarks tied to a ceasefire in the region.

“The movement on domestic pump prices next week could make a U-turn, from a potential increase as tracked from the first two days Mean of Platts Singapore (MOPS) average, to a possible status quo to rollback due to the easing down of MOPS prices as a result of the de-escalation of the tensions in the Middle East,” Bellas said.

Bellas said the de-escalation has already triggered steep declines in benchmark prices, which could filter through to local pumps if sustained.

“It can lead to a sharp decline in crude oil and refined fuel prices from exorbitant levels, but will likely remain elevated because the supply situation has not changed,” he said.

He added that initial market readings show a significant drop in refined fuel prices.

Initial projections showed a sharp drop in MOPS prices, with diesel falling by about $40 per barrel compared to the previous day’s close, while gasoline was projected to decline by roughly $10 per barrel.

Still, Bellas warned that the relief may prove fragile, with markets expected to quickly reassess once the extent of infrastructure damage and supply disruptions becomes clearer.

“However, markets may bounce back in a day or two after digesting the extent of the current damage to infrastructures and lead time to restore production and exports, and after assessment of the strength or fragility of this declared ceasefire,” he said.

Government data showed that in early March, when the war broke out, gasoline prices ranged from P68 to P83 per liter, diesel from P67 to P108, and kerosene from P61 to P112. By mid-April, prices had climbed sharply: gasoline reached P86 to P119 per liter, diesel P127 to P172, and kerosene P149 to P177.

Despite rising prices, the Department of Energy said the country’s fuel supply remains steady, with sufficient stocks to meet demand for more than 50 days. Total fuel inventory stands at 75.05 million liters. 

Gasoline stocks are at 23.33 million liters, enough for nearly 58 days, while diesel totals 32.52 million liters, covering around 47 days. Kerosene supply, at 142,140 liters, tops the list with 106 days of coverage.

Other fuels are holding steady as well. Jet fuel and fuel oil inventories stand at 6.32 million liters and 2.47 million liters, enough for 66 and 52 days, respectively, while liquefied petroleum gas sits at 10.27 million liters, sufficient for 33 days.