Increase anticipated in diesel costs next week, while gasoline prices are set to decrease.
The prices of diesel, kerosene, and gasoline in the Philippines are expected to increase next week, according to predictions made by Leo Bellas, the president of Jetti Petroleum.
The outlook for diesel prices remains supported by tighter regional availability and firm demand. Diesel products are forecast to rise between PHP0.40 and PHP0.60 per liter, while kerosene may also see a similar hike of around PHP1 per liter. Gasoline prices may increase by approximately PHP0.50 to PHP0.80 per liter, although there is some uncertainty about gasoline price changes next week.
The main factors influencing these price changes include renewed Houthi attacks on shipping vessels in the Red Sea, a critical trade route connecting Europe, the Middle East, and Asia, which disrupts oil supply chains. Strong global demand for crude oil and refined fuel products, more than offsetting the additional oil supply resulting from OPEC+’s decision to unwind production cuts in August, also plays a significant role.
Forecasts of reduced U.S. oil production contribute to tighter supply expectations, while a bearish outlook on oil demand due to potential adverse impacts of U.S. tariffs on global economic growth slightly restrains price increases. However, these factors are outweighed by the disruptions in oil supply chains and robust crude oil demand globally.
Earlier in the week, fuel prices were buoyed by concerns of tightening supplies following new European Union sanctions on Russia and the announcement that the United States would consider sanctioning Russian oil to end the war in Ukraine. However, these factors have since weakened due to expectations that the new sanctions will have minimal impact on supplies.
Bellas added that, as Russia is a key global supplier of diesel and gasoline, the implications of the new sanctions, if implemented, could be severe. The forecast for gasoline prices is affected by inventory builds at key trading hubs and signs of softening demand, and gasoline prices are projected to go down between PHP0.10 and PHP0.30 per liter next week.
The Department of Energy and fuel firms typically announce and implement price adjustments on Mondays and Tuesdays respectively, so final confirmed prices will be known soon. In summary, next week's fuel price increases are driven largely by geopolitical tensions affecting oil shipping routes and robust crude oil demand globally, with diesel and kerosene expected to rise more noticeably than gasoline.
[1] News article 1 [2] News article 2 [3] News article 3 [4] News article 4
[1] Despite the uncertainty over gasoline price changes, the industry analyst Leo Bellas predicts increase in prices, potentially affecting consumers in Manila and other parts of the Philippines.
[2] Furthermore, the robust global demand for energy resources, coupled with disruptions in oil supply chains, might push the prices of diesel and kerosene higher in various industries, including transportation and manufacturing, within Manila and beyond.
