Diesel hike eases, but still seen near P10/liter

The expected diesel price hike next week has eased from an earlier forecast of more than P10 per liter, but motorists could still face an increase of up to P9.50 as tight global supplies keep fuel prices elevated.

Jetti Petroleum Inc. president Leo Bellas said Saturday diesel prices are now estimated to increase by P8.50 to P9.50 per liter for the week of Sept. 21, lower than the P10 to P10.50 range projected using the first four trading days.

Gasoline, meanwhile, could increase by P4.50 to P5.50 per liter, compared with the earlier estimate of P4.50 to P5.

Latest estimates

The latest estimates are based on the full-week Mean of Platts Singapore (MOPS), foreign exchange averages, and other factors.

“Oil prices have pulled back as recent efforts by Saudi Arabia to restore export capacity eased near-term supply anxiety and concern,” Bellas said.

Saudi Arabia is seeking to restore half of its export capacity through the East-West pipeline within days and is offering more cargoes to Asian refiners through ship-to-ship transfers off the coast of Oman.

“Prices fell further after China reportedly asked Iran, acting on a request from Saudi Arabia, to limit attacks by Houthi rebels on Saudi oil infrastructure,” Bellas said.

Physical oil supplies still tight

But the relief in global prices has been limited as physical oil supplies remain tight.

“However, tight physical supplies limited further declines,” Bellas said.

Supply risks also persist around major Middle Eastern shipping routes. “Furthermore, vessel traffic in the Strait of Hormuz continues to fall and remains risky while ongoing Saudi-Houthi tensions threaten renewed disruptions to Red Sea shipping and regional energy infrastructure,” Bellas said.

Diesel remains particularly exposed to tight supply as Asian refiners contend with feedstock risks, refinery disruptions and maintenance.

“Rising feedstock risks for Asian refiners and tightening supplies due to refinery disruptions and maintenance continue to support the prices of middle distillates and diesel this week,” Bellas said.

Gasoline remain under pressure

Gasoline prices also remained under upward pressure.

“Tight prompt supply and future supply concerns amid firm demand have driven Asian gasoline prices higher week-on-week as well,” Bellas said.

Despite the downward revision, the projected P8.50 to P9.50 diesel increase would still mean a substantial additional cost for motorists once the new pump prices take effect.