After weeks of agony at the pumps, motorists can expect a significant reprieve this week, with diesel prices expected to post a rare steep rollback of up to P26 per liter.

An industry source, who requested anonymity, confirmed on Saturday that estimates based on the full week trading at the Mean of Platts Singapore indicated diesel prices could drop by around P24 to P26 per liter, a much deeper cut than earlier projected.

Gasoline prices, meanwhile, are projected to decline by a more modest P2 to P3 per liter.

Even with the development, fuel prices remain elevated. From the start of the year until 14 April, government data showed that gasoline prices ballooned by P50.20 per liter, kerosene by P78.70 per liter, and diesel by P89.85 per liter.

With the projected slash, diesel prices should settle at around P131.11 per liter compared to the prevailing price last week.

Oil companies are expected to announce the official price adjustments ahead of their implementation which is typically on a Tuesday. Actual pump prices will still vary depending on location and fuel provider.

For the first time since the outbreak of the Middle East war, pump prices moved lower last week, with diesel declining by P20 to P23 per liter, gasoline by P4 to P6.50 per liter, and kerosene by P8.50 to P11.50 per liter.

Last week, Dubai crude decreased by around $8 per barrel. Refined products followed suit, with gasoline down about $8 per barrel, kerosene by $11 per barrel, and diesel posting the steepest decline of $28 per barrel.

Avgas surcharge swings up

A sharp increase in the aviation fuel surcharge looms, however, with rates potentially jumping from Level 8 until mid-April to the maximum Level 20 for the remainder of the month as fuel prices continue to climb.

While an updated surcharge matrix has yet to be officially released, the Department of Transportation (DoTr) said it has begun discussions with the Civil Aeronautics Board (CAB) to assess whether adjustments are needed.

Speaking at a forum on Saturday, Acting Transportation Secretary Giovanni Lopez said the sharp increase in jet fuel prices is prompting a review of the surcharge level.

“When the crisis began, jet fuel was really one of the most affected. Before the war, airline companies were buying it at $80 to $90 per barrel, but now it has surged to around $200 per barrel,” he said.

He noted that while the country maintained relatively lower surcharge levels in recent months, global benchmarks have reached the highest tier.

“For the entire month of March, we kept it at Level 4 even though fuel surcharges in other places had reached Levels 13 and 14. As far as I know, the surcharge in other parts of the world is now at Level 20,” Lopez said.

The DoTr is coordinating with the CAB on the next steps, although Lopez expressed hope the maximum level can still be avoided.

A temporary 15-day monitoring cycle, replacing the usual monthly schedule, has been implemented to allow faster response to rising fuel prices.

“We have already spoken with the CAB to make the necessary adjustments if needed, but hopefully it won’t reach Level 20 even if that is what’s warranted. I will talk to the CAB because the impact is really being felt,” he said.

Under a potential shift to the maximum Level 20 fuel surcharge, surcharges will range from P661 to P1,933 for domestic flights, up from P253 to P787 at Level 8.

A mid-range route would increase from P503 to P1,316, or an additional P813 per passenger one-way, while longer routes see differences of over P1,100.

The impact is even more pronounced for international travel. Under Level 20, fuel surcharges range from P2,183 to P16,232, compared with P835 to P6,208 at Level 8.