Philippines Braces for Fuel Price Hike Amid Mideast Tensions

Local oil firms are expected to implement another hefty increase for petroleum products next week amid growing supply concerns due to escalating tensions in the Middle East. Jetti Petroleum president Leo Bellas said on Friday that diesel may jump by P6 to P6.50 a liter, and gasoline may likewise go up by P5.50 to P6 per liter. Bellas explained that world oil prices have rebounded significantly due to concerns of further disruption to oil supply in the Arabian Peninsula. He pointed out that the Strait of Hormuz remains largely closed to vessel traffic, and growing security risks in the Bab el-Mandeb Strait have expanded the conflict and raised the threat to global energy supplies and trade beyond the Persian Gulf. He further elaborated that the Gulf is a major source of diesel, and while tanker flows were only beginning to recover before hostilities flared again, renewed military strikes and reciprocal blockades by the US and Iran have raised fresh supply concerns. Bellas’ estimates were based on the first four days of trading at the Mean of Platts Singapore (MOPS), which serves as the basis for pricing refined petroleum products in Southeast Asia, and foreign exchange movements. However, he noted that these projections could still change with one trading session left. This week, fuel retailers were allowed to implement a maximum P10.68-per-liter hike for diesel. Gasoline also rose by as much as P3.65 per liter, while kerosene had the highest increase at P11.77 per liter. In response to the expectations of significant adjustments in fuel prices due to renewed hostilities in the Middle East, the Department of Energy (DOE) is again imposing government-mandated price adjustments across petroleum products. "Let me assure the public on the point that matters most. Our fuel supply is sufficient. Inventories remain adequate. Filipinos can go about their normal routines and operations with confidence," said Energy Secretary Sharon Garin. As of July 17, data from the DOE showed that the country’s fuel supply is enough for 46 days. This anticipated fuel price hike could impact the Philippine economy, particularly transportation costs and inflation. For a country reliant on remittances from overseas workers, domestic inflationary pressures could lead to increased prices for essential goods, potentially straining household budgets. The instability in the South China Sea also indirectly affects the Philippines' energy security.