Fuel prices are expected to decline sharply after nearly a month of consecutive increases, as easing concerns over Middle East supply disruptions weigh on global oil and refined fuel markets.

Industry estimates indicate diesel prices could fall by P6.50 to P7.50 per liter, while gasoline prices may decrease by P3.50 to P4.50 per liter next week, based on the first four days of Mean of Platts Singapore trading and foreign exchange movements.

Crude, refined fuel prices under pressure

An industry source said Friday the global crude and refined fuel prices have come under pressure amid growing optimism over diplomatic developments involving the United States and Iran and expectations that shipping through the Strait of Hormuz will normalize.

“Crude and refined fuel products prices are pressured by improving sentiments that the US and Iran are moving closer towards a peace deal and growing optimism that the Strait of Hormuz will be reopened soon,” the source said.

“Supply tightness in the diesel market is seen easing down, weighing on the price benchmark, as recent market developments point to some improvement in supply conditions, with refiners increasingly able to secure alternative crude supplies.”

Gasoline prices are likewise seen softening despite strong seasonal demand and declining inventories.

Asian gasoline prices

“Asian gasoline prices are seen to trade in a tight range but could favor the downside following recent developments in the Middle East. Supply and demand balances however, remained precarious as global gasoline markets remain tight with the onset of the summer season while inventories continue to decline,” the source said.

Market sentiment was further boosted by reports that Washington and Tehran have agreed to extend a ceasefire for another 60 days and allow maritime traffic through the Strait of Hormuz, a key route for global oil shipments.

Should the projected rollback materialize, the prevailing Metro Manila pump prices could fall to as low as P66.66 per liter for diesel and P68.50 per liter for regular gasoline, offering relief to motorists after weeks of rising fuel costs.

Premium gasoline grades, meanwhile, could range from P76.48 to P106.20 per liter, while Diesel Plus may sell for between P76.66 and P92.06 per liter.