Motorists across the Philippines are bracing for another substantial increase in fuel prices, with projections indicating a potential surge of up to PHP1.60 per liter for gasoline next week. This development comes amid persistent geopolitical instability in the Middle East and production challenges in key Asian markets.
Projected Price Increases
According to Jetti Petroleum president Leo Bellas, who cited price developments as of Thursday, diesel prices are expected to climb between PHP0.80 to PHP1 per liter, while gasoline could see a more significant increase ranging from PHP1.40 to PHP1.60 per liter. This follows recent adjustments earlier in the week, where gasoline prices rose by PHP0.60 per liter, with diesel and kerosene increasing by PHP1.20 per liter.
Geopolitical Factors Driving the Surge
Bellas emphasized that ongoing uncertainty in the Middle East continues to exert upward pressure on fuel prices. "The risk of war between the US and Iran remains the key driver supporting crude oil prices," he stated. He further explained that with negotiations still unresolved and both sides signaling readiness to escalate tensions, the persistent threat of disruption-driven price spikes is keeping market prices elevated.
Additional geopolitical risks include Iran's recent live-fire drills in parts of the Strait of Hormuz, which highlighted the country's capability to disrupt critical transit routes, even if temporarily. This strategic waterway is essential for global oil shipments, and any interference can have immediate effects on international crude prices.
Production and Export Challenges
Beyond Middle East tensions, production issues in Asia are contributing to the price pressures. Bellas noted that lower exports from China and South Korea, resulting from reduced production during the Lunar New Year holidays, are pushing gasoline prices even higher. These seasonal reductions in output have tightened supply at a time when demand remains steady.
Counterbalancing Factors
Despite these upward pressures, Bellas pointed to several factors that could help moderate price gains. "Renewed tariff uncertainty in the US" is creating some market hesitancy, while the potential resumption of production increases by OPEC+ from April, following a first-quarter pause, could lead to inventory builds that temper price increases. However, these mitigating elements may not be sufficient to offset the strong geopolitical and supply-side drivers currently influencing the market.
As consumers prepare for higher transportation costs, industry analysts continue to monitor the volatile situation in the Middle East and global production patterns that will determine fuel price trajectories in the coming weeks.
