Philippines reviews fuel pricing as Middle East tensions may hike prices by P10/L

The Philippines is facing a potential surge in fuel prices, with diesel expected to jump by as much as P10 per liter next week due to renewed tensions in the Middle East that have reignited concerns over global oil supplies. In response, the Department of Energy (DoE) is reviewing its fuel pricing mechanism, considering a shift from announcing a range of weekly price adjustments to a single, prescribed adjustment. Rino E. Abad, director of the DoE’s Oil Industry Management Bureau, stated that a meeting to review the pricing rules would be held on Friday. Energy Secretary Sharon S. Garin indicated the department's intention to set a definitive price adjustment rather than a flexible range, acknowledging the heightened market volatility. Industry estimates project diesel prices to increase by P9 to P10 per liter, and gasoline prices by P3.50 to P4.50 per liter. Leo P. Bellas, President of Jetti Petroleum, Inc., attributed the significant rise in world oil prices this week to renewed hostilities in the Middle East, which have led to a substantial decline in vessel traffic in the Strait of Hormuz, a critical chokepoint for global oil shipments. Brigitte Carmel C. Lim, Senior Vice-President and Chief Operating Officer of Top Line Business Development Corp., noted that local pump prices could continue to rise if elevated global prices persist, but cautioned that it was too early to predict double-digit increases, depending on the geopolitical situation. If these projected increases materialize, gasoline and diesel prices in Metro Manila and surrounding areas could exceed P100 per liter. The Philippines, heavily reliant on oil imports, sees its domestic pump prices highly sensitive to global crude price swings. To mitigate the impact of rising fuel costs and inflation, President Ferdinand R. Marcos, Jr. announced an expansion of the government’s Unified Package for Livelihood, Industry, Food and Transport Assistance Program. Under the expanded program, approximately 1.5 million low-income workers registered with the Social Security System and about 2.5 million poor and near-poor households identified through the 2024 community-based monitoring system will receive P2,000 per month from July to December. Additionally, 3.5 million beneficiaries of the Pantawid Pamilyang Pilipino Program and the Walang Gutom Program will receive a one-time grant of up to P2,000. This expanded program is expected to benefit around 7.5 million households, or roughly 37.5 million Filipinos. "Our goal is to protect the ability of Filipino families to meet their daily needs," Mr. Marcos said. "At the same time, we have expanded the coverage of the assistance so that more Filipinos can benefit from the program." Palace Press Officer Clarissa A. Castro said the Department of Budget and Management had released P12.375 billion for the expanded assistance, sourced from savings. She explained that the administration is prioritizing vulnerable sectors to prevent sudden increases in transport fares and commodity prices. Assistance to transport workers, she noted, indirectly benefits everyone by helping to stabilize fares and goods prices. Support for delivery vehicles transporting essential goods, including toll incentives, will also continue to contain logistics costs. As the Philippines imports almost all its petroleum requirements, its domestic pump prices are highly susceptible to global crude price fluctuations. The government stated it would continue to assess its fiscal capacity and release available funds to those most in need if the conflict persists and the budget allows, while balancing its resources. Information Source: BusinessWorld Nation