Motorists could see a sharp rollback in diesel prices next week, potentially reversing more than the latest increase, as easing supply concerns and rising regional inventories pull down international petroleum prices.

Industry estimates from Monday to Thursday show diesel prices are likely to decline by P3.50 to P4 per liter, while gasoline could fall by P0.25 to P0.75 per liter next week.

Jetti Petroleum Inc. President Leo Bellas said Friday petroleum prices declined this week as the market viewed threatened United States sanctions as posing less risk to physical oil supplies than an escalation of military action.

“Prices declined this week as threatened US sanctions fell short of the market’s expectations and the market viewed the economic pressure as a lower-risk path for physical supply than a military escalation, reducing the oil market’s anxiety and easing immediate supply concerns,” Bellas said.

Prices were further pressured by signs of a possible return to mediation aimed at ending the war and reopening the Strait of Hormuz after Iran said it had resumed talks with Oman.

Supply conditions, however, remain constrained, leaving the market exposed to renewed disruptions.

More refined petroleum products entering the market have also helped ease regional supply tightness.

“Rising refined products outflows from China due to renewed refined product export allowances, including incremental flows from the US and India, helped ease some regional shortages and keep the markets supplied,” Bellas said.

Growing regional inventories as supplies from China and India continue to rise have likewise weighed on petroleum product prices.

The expected rollback, however, could still shrink before the final adjustments are announced as global oil prices have recently rebounded.

Bellas said the rebound followed reports that the US was not interested in returning to the previous ceasefire deal terms with Iran, renewing concerns over the outlook for the conflict and oil supplies.

If the forecast holds, the diesel rollback would more than erase the P2.30 to P2.31 per liter increase that oil companies implemented on 25 August.

Based on the latest adjustments and prevailing Metro Manila prices, regular diesel could retreat to an estimated P75.30 to P96.31 per liter next week from the current estimated range of P79.30 to P99.81.

Premium diesel could fall to around P85.29 to P99.65 per liter, potentially bringing even the upper end of the range back below P100 per liter.

Gasoline, meanwhile, could decline to an estimated P64.45 to P97.42 per liter, depending on the fuel grade and the actual price cut implemented by individual oil companies.