Philippines Braces for Fuel Price Hike Next Week

Another round of increases in pump prices is expected next week in the Philippines, with gasoline projected to rise by P4.50 to P5.00 per liter, and diesel by P2.00 to P2.50 per liter, according to an oil industry source. These estimates are based on the Mean of Platts Singapore (MOPS) and foreign exchange trading from September 7-10. "Diesel continues to maintain its strength on tight global supply amid rising seasonal demand. Reduced exports from the Middle East and Russia due to the impacts of the wars in Iran and Ukraine and lower US exports compounded the supply concerns," the source said. "Asian gasoline prices surged, supported by firm demand amid supply constraints and uncertainty due to lower Chinese exports and as multiple refineries in the far east undergo planned maintenance. Depressed Middle East exports and Russia’s gasoline export ban further contributed to the supply concerns," it added. The actual price adjustments will be announced on Monday, September 14, and will take effect on Tuesday, September 15. This week, oil firms already hiked prices by P4.69 for gasoline, P5.18 for diesel, and P5.58 for kerosene per liter. Department of Energy - Oil Industry Management Bureau (DOE-OIMB) director Rino Abad also cited ongoing geopolitical concerns as a reason for the continued price increases. Abad highlighted that shipping costs have also increased due to the conflict in the Red Sea, as Yemen’s Houthis have taken control of nearby areas. This could cause supply disruptions from Saudi Arabia, which exports around 5 million to 6 million barrels daily. "‘Pag nasara ho ‘yan, lilibot na ho ‘yung mga shipping company papuntang Cape of Good Hope at tsaka bababa dito sa Asia. Magiging twice na ‘yung duration. Baka 60 days, mga two months na instead of just 25 days," he said in an interview on Unang Balita. He noted, however, that shipments have still continued to pass through the route and it remains open, but the elevated risk has pushed up shipping costs such as insurance. The anticipated fuel price hike is expected to further pressure the Philippine economy, particularly transportation costs and household budgets. For an economy reliant on remittances from overseas Filipino workers, rising inflation poses a significant concern for the daily lives of its citizens.