FUEL prices are projected to increase again next week, as ongoing Middle East tensions continue to influence the global market, local oil industry sources said on Friday.
They said diesel prices will increase by P1.75 to P2.25 per liter, while gasoline prices are expected to rise by about P1 to P1.50 per liter.
These estimates are based on the 4-day trading of Mean of Platts, Singapore, which serves as the pricing basis for refined goods in Southeast Asia.
“Global oil prices climbed due to a rebuild in the geopolitical premium as the expiration of the mid-June US-Iran memorandum of understanding, and both sides expressing intentions to take a harder line have made markets price in the possibility of a prolonged crisis.
Further supporting the higher prices is the increasing risks to Russian supply following Black Sea loading disruptions due to concerns over the reliability of replacement sour crude to offset the reduced Middle East supply, a local oil industry source said.
“Diesel prices have remained on the higher side due to the still-fragile physical balances, as despite the improving replacement supply from continued acceleration of outflows from China, there are still concerns remaining over low inventories, mostly due to uncertainties in the Middle East and because of constrained exports from Russia as a result of various attacks on its refining sector,” the source added.
“Furthermore, the renewed hostilities in the Middle East and the situation in Russia have also kept Asian gasoline prices at high levels. Note, however, that further price increases for gasoline are currently capped due to higher regional supplies from rising India-China outflows,” the source continued.
This week, based on the Department of Energy announcements, diesel prices jumped by P3.84 per liter, while gasoline prices went up by P2.49 per liter.
