How high would pump prices be if crude hits $200/barrel? 

As the crisis in the Middle East continues, with the US-Israel-Iran war entering its third week with no signs of easing, the global oil price shock persists with benchmark Brent crude still flirting with $100 per barrel.

The effects of the Middle East conflict on global oil prices are already being felt heavily in the Philippines, as pump prices climb at their steepest this week, with diesel expected to reach more than P114 per liter while gasoline could go as high as over P91 per liter as fuel retailers implement another round of staggered mega price hike.

With Iranian authorities warning the world that petroleum prices could spike to as high as $200 per barrel amid threats to continue blocking the Strait of Hormuz, the country should brace for more waves of increases.

GMA News Online asked Jetti Petroleum Philippines president Leo Bellas how high pump prices could go if crude oil hypothetically hits $200 per barrel.

“The local price would be around P150 per liter on diesel,” Bellas said, noting that the estimated pump price was determined “assuming the spread between crude oil [at $200 per barrel] and diesel will remain at $90 per barrel, which is the current difference between Brent crude and diesel MOPS (Mean of Platts Singapore).”

He was referring to “crack spread,” which refers to the pricing difference between a barrel of crude oil and the refined petroleum products derived from it, such as diesel and gasoline.

“For gasoline, applying the current spread of $40 per barrel versus $200 per barrel of crude, this should equate to about P120 per liter,” Bellas said.

The oil industry executive, however, said that “the spread could go much higher than current levels given the very tight supply.”

Nonetheless, he said that due to the volatile situation, it is still difficult to estimate fuel price movements in the coming days.

“World prices are still very volatile, with bias on the upside,” he said. 

For the week of March 17 to 23, the Department of Energy announced the following fuel price adjustments:

Diesel: P20.40 to P23.90 per liter

Gasoline: P12.90 to P16.60 per liter

Kerosene: P6.90 to P8.90 per liter

Oil companies are implementing the hikes as part of a staggered price increase triggered by the escalating conflict in the Middle East.

Among the sectors hardest hit by the fuel price hikes is the transportation sector.

To ease the burden, President Ferdinand ''Bongbong'' Marcos Jr. ordered the immediate distribution of P5,000 fuel subsidy for public transport drivers.

The Department of Transportation and the Department of Social Welfare and Development started the cash payout Tuesday with over 139,000 tricycle drivers in Metro Manila as the first recipients.

Marcos also announced that cash and fuel subsidies will be provided to other PUV drivers, farmers, and fisherfolk.

The President said P3,000 in fuel subsidy will be released to 26,000 farmers. On Thursday, March 19, P3,000 in fuel subsidy will be distributed to 26,000 fisherfolk. 

Congress is also working to pass a bill allowing the President to cut or suspend the excise tax on oil to lower prices .—LDF, GMA Integrated News