Fuel price surge could top P5/liter

BIG-TIME fuel price hikes to be announced today could end up even higher than earlier estimated after the United States bombed Iran, an industry official said.

Last Friday, industry sources said that gasoline prices could surge by around P2.50 to P3.00 per liter, diesel by a higher P4.30 to P4.80 and kerosene by about P4.25 to P 4.40 as Israel and Iran continued to trade attacks.

Officials warned of oil price shocks should the conflict escalate, which subsequently happened when the US targeted nuclear sites in Iran on Saturday.

“This week's increases on local fuel prices could rise further, as world oil prices could now jump upwards because of the new development,” Jetti Petroleum President Leo Bellas said on Sunday.

“Due to this, diesel could now increase by more than P5.00 per liter, while gasoline prices could go up from initial estimates as well, as the potential increase in premium and freight, which are projected to rise because of the expanded scope of hostilities, could be factored in the domestic prices this week,” he added.

“We will know the effects as soon as trading commences early morning on Monday.”

Fuel price hike projections are based on Mean of Platts (MOPS) trading in Singapore. Based on five-day trading as of June 22, diesel prices could go up as much as P4.90 to P5.10 per liter and gasoline prices could rise by about P3.20 to P3.40 per liter.

“Based on the four-day trading of MOPS and recent global developments, fuel prices are expected to greatly increase … [this] week, as a major oil price shock continues to loom with the Israel-Iran conflict threatening to disrupt critical global shipping passages,” Oil Industry Management Bureau Director Rodela Romero said last Friday.

Bellas echoed this last week, saying “prices of crude oil and refined fuel products prices have jumped considerably … due to growing worries of supply disruption that may result from the ongoing Israel-Iran conflict.

“In addition rising fears that the war could disrupt trade flows in the Strait of Hormuz, and concerns that a direct US involvement would widen the conflict and trigger direct attacks on energy infrastructures, have also caused the further spike in prices as well,” he added.

Gasoline and diesel prices were increased by P1.80 per liter last Tuesday while kerosene rose by P1.50.

Year to date, gasoline is now P6.90 per liter higher while diesel is up P6.65. Kerosene, on the other hand, is down P0.75 per liter since the start of the year.