Fuel prices have spiked again after the United States launched strikes on Iran after the latter attacked vessels on a route skirting the Strait of Hormuz, prompting retaliatory attacks by Iran on US infrastructure in neighboring Gulf states.
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Motorists could face another hefty increase in diesel prices next week as escalating tensions in the Middle East and tightening global fuel supplies push oil markets higher, while gasoline prices are expected to remain largely stable.
Industry estimates from Monday to Thursday showed that diesel prices could increase by P2 to P4 per liter next week, while gasoline prices could either decline by P1 or rise by as much as P1 per liter, depending on trading in the remaining days of the pricing cycle.
Forecast
If the forecast holds, diesel prices in Metro Manila could range from P61.65 to P80.69 per liter, while Diesel Plus could sell for P68.30 to P81.40 per liter.
Gasoline prices could range from P69.50 to P99.45 per liter for RON97/100, P67.25 to P95.68 for RON95, and P64.45 to P88.76 for RON91.
“Prior to the latest flare-up in the US-Israeli war with Iran, diesel and middle distillates prices have strengthened on the back of firm demand while supply continues to tighten as physical availability remains constrained,” Leo Bellas, president of Jetti Petroleum Inc., said on Friday.
“The potential loss of Russian diesel exports is also adding another layer of support as Russia’s energy infrastructure continues to sustain damage from intensified Ukrainian drone attacks,” he added.
Gasoline cushioned
Gasoline, meanwhile, has been cushioned by adequate regional supplies despite steady demand.
“Asian gasoline prices have weakened slightly as the regional market remained balanced amid ample supplies and steady regional demand. Looking ahead, prices are likely to firm up as balances across global gasoline markets are tightening amid the peak Northern Hemisphere summer demand season and supply constraints due to refinery maintenance and run cuts,” he said.
Bellas said the latest military exchanges in the Middle East have added fresh risk premiums to crude prices.
Iranian strikes
“The July 7 Iranian strikes directly targeting vessels attempting to transit the Strait of Hormuz outside its officially-approved route, the ensuing retaliatory strikes by the US following the Iran attacks, and revocation by the US of sanctions relief for Iranian oil exports have supported prices,” he said.
He added that prices climbed further after the United States launched strikes on Iran on 9 July, prompting retaliatory attacks by Iran on US infrastructure in neighboring Gulf states.
“The military strikes in the Middle East continue to expose the ongoing risk to supply, and the latest escalation in the US-Iran war has dimmed the prospect of having a lasting peace deal,” Bellas said.
This week, gasoline prices remained unchanged or rolled back by as much as P1.75 per liter, while diesel prices increased by P1.57 to P3.57 per liter and kerosene prices by P1.70 to P3.70 per liter.
