Global oil jitters spark fresh fuel hike fears

Motorists should brace for another round of fuel price hikes next week, with diesel poised for a hefty increase as fresh Middle East tensions and tightening global supplies push oil prices higher anew.

Industry estimates showed diesel prices could jump by P2 to P2.50 per liter by Tuesday morning, while gasoline prices may climb by P0.75 to P1.25 per liter, based on the first four days of trading in Mean of Platts Singapore and foreign exchange averages.

Rollercoasting pump prices

The looming increases come even as motorists and households just absorbed mixed fuel price movements this week, extending the rollercoaster in pump prices that has kept transport and commodity costs volatile.

An industry source who requested anonymity said diesel prices are once again under pressure after crude prices surged on the back of a “re-escalation of geopolitical risks in the Middle East.”

“The middle distillate market remains structurally tight as stocks decline further and demand normalizes seasonally, further firming up the price of diesel,” the source said.

Diesel to bear brunt of price increases

Diesel, which fuels public transport, logistics, and much of the country’s supply chain, is expected to bear the brunt of the increase as global inventories continue to thin.

Gasoline prices are also tracking upward due to tightening supplies worldwide, the source added.

“Reduced refinery output as refiners in Asia are forced to process lighter grades of crude, for which refineries are not optimized, due to Middle East crude feedstock shortage,” the source said.

This week, gasoline prices rose by around P0.45 to P0.50 per liter. Diesel prices, however, dropped by about P9.50 to P9.60 per liter, reversing the previous week’s increase, while kerosene prices fell by around P13.00 to P13.30 per liter.

Households are also facing higher cooking gas costs this May, with liquefied petroleum gas prices increasing by about P13 per 11-kilogram cylinder.

Fuel supply stable

Despite the uncertainty, the DoE assured the public that fuel supply remains stable. Latest data as of 8 May showed the country has enough fuel stocks to last 50.70 days.

“We have had a steady supply since the start of the Middle East conflict,” Energy Secretary Sharon Garin said. Still, she urged consumers to continue conserving fuel and electricity amid persistent global market uncertainty.