DIESEL and gasoline prices are projected to decline once more next week, due mostly to recent diplomatic breakthroughs on the conflict in the Middle East, local oil industry sources said on Friday.
They said both diesel and gasoline prices will go down by about P4.50 to P5.00 per liter next week.
These estimates are based on 4-day trading of Mean of Platts Singapore, the pricing basis for refined goods in Southeast Asia.
This will also be the second consecutive week diesel and gasoline prices are estimated to decrease.
“Global oil prices retreated as renewed hopes of a diplomatic breakthrough to the US-Iran conflict eased the geopolitical risk premium, despite the lingering uncertainty and persistent risks to Red Sea shipping. As a result, fuel products declined in line with crude, with Asian diesel and gasoline falling sharply as easing geopolitical risks reduced the recent supply premium,” a local industry source said.
“Furthermore, the stronger peso this week against the US dollar also helped put more downward pressure on domestic prices,” the source added.
However, the source warned that despite the recent rollbacks, prices are expected to remain elevated amid tightening supply as continuing disruptions to Middle East exports through the Strait of Hormuz and from Saudi Red Sea ports limit the availability of feedstock for Asian refiners.
“Further downside is capped due to concerns over a tightening global supply pool as Russian product outflows continue to decline. In addition, the continued supply disruptions and conflicting political statements from the US and Iran are expected to keep prices volatile as well,” the source continued.
This week, based on available price adjustment bulletins, diesel prices dropped by up to P0.60 per liter, and gasoline prices decreased by up to P0.73 per liter.
