Diesel Prices May Surge by P10.50/L, Gasoline by P4.50/L Next Week Amid Mideast Tensions

Major pump price hikes are expected next week, with diesel potentially seeing an increase of up to P10.50 per liter and gasoline by P4.50 per liter, according to an oil industry source. These anticipated fuel price adjustments are primarily driven by an elevated geopolitical risk premium in the Middle East. World oil prices are being supported by renewed tensions, which have rebuilt after Iranian attacks on commercial ships attempting to transit the Strait of Hormuz outside the Iranian-approved route, and the subsequent retaliatory strikes by the US on Iranian military assets. Concerns of supply disruption, tightening product balances as vessel traffic in the Strait of Hormuz has declined sharply, and the US naval blockade of ships to and from Iranian ports have pushed prices higher. The oil industry source also noted that a decline in diesel exports from Russia has contributed to the price movement. In response to the rising fuel prices, President Ferdinand “Bongbong” Marcos Jr. announced on Thursday that the government has expanded the United Package for Livelihoods, Industry, Food, and Transport (UPLIFT) program. This program provides financial assistance to indigent Filipinos affected by the increasing fuel prices. The President stated that through the UPLIFT Assistance, 7.5 million households, or 37.5 million Filipinos nationwide, will receive cash assistance from the government. Specifically, 3.5 million household beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps) and the Walang Gutom Program will receive a one-time additional assistance of up to P2,000. As a nation heavily reliant on oil imports, the Philippines is susceptible to global price volatility. Such increases in fuel costs can lead to higher transportation expenses, potentially triggering a ripple effect on the prices of other essential goods and services, including food, thereby impacting the overall cost of living for its citizens.