PUMP pain returns Motorists queue at a gasoline station along Soriano Avenue in Manila as the Department of Energy announces another sharp increase in pump prices, driven by renewed tensions in the Middle East that continue to rattle global oil markets.
PHOTOGRAPH by toto lozano for DAILY TRIBUNE
Motorists may get another round of substantial relief at the pumps next week, with gasoline and diesel prices seen falling by P4.50 to P5 per liter as international oil prices retreat and the peso strengthens against the United States (US) dollar.
Based on current estimates, gasoline could retail at around P63.97 to P94.27 per liter, depending on the grade and retailer, while regular diesel could range from P74.29 to P93.70 per liter. Diesel plus could settle between P85.70 and P99.40 per liter.
A P4.50 to P5.00 per liter rollback would translate to savings of about P225 to P250 for a 50-liter full tank, providing some respite not only to motorists but also to transport operators and businesses grappling with higher fuel costs.
Leo Bellas, president of Jetti Petroleum, Inc., said the decline was driven by renewed optimism over a possible diplomatic breakthrough in the US-Iran conflict, which has reduced some of the geopolitical premium built into oil prices.
“Oil price retreated as renewed hopes of a diplomatic breakthrough to the US-Iran conflict eased the geopolitical risk premium, despite the lingering uncertainty and persistent risks to Red Sea shipping,” Bellas said in a text message on Friday.
Refined petroleum products followed crude prices lower, with Asian diesel and gasoline prices falling sharply as concerns over potential supply disruptions eased.
“Fuel products declined in line with crude, with Asian diesel and gasoline falling sharply as easing geopolitical risks reduced the recent supply premium,” Bellas said.
The international price decline was reinforced by the peso’s appreciation against the US dollar, which Bellas said placed further downward pressure on domestic fuel prices. A stronger peso lowers the local-currency cost of dollar-denominated petroleum imports.
Still, the expected rollback may offer only a reprieve, as underlying supply conditions remain tight.
Bellas said strong demand and continuing disruptions to Middle Eastern exports through the Strait of Hormuz and Saudi Red Sea ports are limiting feedstock available to Asian refiners.
“Despite the recent pullback in prices, fundamentals remain relatively firm due to strong demand amid tightening supply,” Bellas said, citing the continuing disruptions to Middle East exports.
The scope for further declines is also being limited by a tightening global supply pool as Russian petroleum product outflows continue to fall.
With supply disruptions persisting and political signals from Washington and Tehran remaining mixed, Bellas said oil prices are likely to stay volatile, with risks increasingly tilted to the upside.
This week, the Department of Energy mandated oil companies to implement a P0.73 per liter cut for all gasoline grades, P0.60 per liter for diesel and diesel plus, and P2.09 per liter for kerosene.
