Oil price hike of up to P5 for gasoline, P2.50 for diesel seen next week

Another round of increases in pump prices is expected next week, based on movements in global prices.

According to an oil industry source, these are the possible fuel price adjustments:

Gasoline +4.50 to +5.00

Diesel +2.00 to +2.50

The oil industry source based the estimates on the Mean of Platts Singapore (MOPS) and foreign exchange trading from September 7-10.

"Diesel continues to maintain its strength on tight global supply amid rising seasonal demand. Reduced exports from the Middle East and Russia due to the impacts of the wars in Iran and Ukraine and lower US exports compounded the supply concerns," the source said.

"Asian gasoline prices surged, supported by firm demand amid supply constraints and uncertainty due to lower Chinese exports and as multiple refineries in the far east undergo planned maintenance. Depressed Middle East exports and Russia’s gasoline export ban further contributed to the supply concerns," it added.

The actual price adjustments will be announced on Monday, September 14, and take effect on Tuesday, September 15.

Firms this week hiked prices per liter of gasoline by P4.69, diesel by P5.18, and kerosene by P5.58.

Department of Energy - Oil Industry Management Bureau (DOE-OIMB) director Rino Abad likewise cited ongoing geopolitical concerns as the reason for the continued price increases.

Abad said shipping costs have also increased due to conflict in the Red Sea, as Yemen’s Houthis have taken control of nearby areas, which could cause supply disruptions from Saudi Arabia, which exports around 5 million to 6 million barrels daily.

“‘Pag nasara ho ‘yan, lilibot na ho ‘yung mga shipping company papuntang Cape of Good Hope at tsaka bababa dito sa Asia. Magiging twice na ‘yung duration. Baka 60 days, mga two months na instead of just 25 days,” he said in an interview on Unang Balita.

(If that is closed, shipping companies will have to reroute to Cape of Good Hope before coming down to Asia. The duration will be doubled, maybe 60 days, around two months instead of just 25 days.)

Abad noted, however, that shipments have still continued to pass through the route and it still remains open, but the elevated risk has pushed up shipping costs such as insurance. —VAL, GMA News