DIESEL and gasoline prices will continue to increase next week, but the spike won’t be a sharp as in previous weeks, a source in the local oil industry source said on Friday.
The per-liter price of diesel is expected to go up by P11 to P12, the source said. The price of gasoline could either stay steady, or increase by around P3.
The estimates are based on the four-day trading of Mean of Platts, Singapore, the pricing index for refined goods in Southeast Asia.
It will be the 11th straight week that diesel and gasoline prices will increase.
The source attributed the relatively smaller increase in fuel prices to signs that the conflict may be de-escalating, resulting in a drop in crude oil price benchmarks, the source said.
On Friday, President Ferdinand Marcos Jr. said is open to proposals to repeal the Oil Deregulation Law and remove the value-added tax (VAT) on fuel, as part of the government’s efforts to cushion the impact of the war in the Middle East on the people.
But right now, the government is focused on delivering “immediate” solutions to the energy problems, Marcos said.
“As I said before, nothing is being discounted, meaning we are discussing everything that can be done so that we can do something to help alleviate the impact of the war in the Middle East,” Marcos said during a media interview in Silang, Cavite.
The Oil Deregulation Law liberalized the downstream oil industry in 1998, allowing oil companies to set pump prices based on global market conditions rather than government control.
Fuel products are subject to a 12-percent VAT, on top of excise taxes, which adds to their overall retail price.
The president said making amendments to the law would require extensive discussion and could not be implemented immediately.
On Tuesday, Senate President Vicente Sotto III filed Senate Bill 1984 that seeks to repeal the 28-year-old Republic Act (RA) 8479, or the Downstream Oil Industry Deregulation Act.
Sotto said now is the perfect time to give back to the state the authority to manage fuel prices.
“Now that our petroleum prices are directly impacted by the geopolitical tension in the Middle East, transparency, scrutiny and uniformity in pricing are needed more than ever,” Sotto said.
Earlier, House lawmakers from the Makabayan bloc pointed out that RA 8479 was flawed because it did not promote competitiveness but instead “consolidated corporate power, enabled coordinated price increases and left the public defenseless.”
Sen. Bam Aquino, meanwhile, wants the VAT on fuel products suspended or reduced to provide relief to Filipinos grappling with soaring pump prices.
Aquino said on Friday lawmakers are now considering a follow-up measure that would grant the president authority to adjust VAT rates on oil products.
“We are studying a measure that goes beyond the excise tax, giving the President powers to suspend or lower VAT on fuel. This could have a bigger impact on prices,” Aquino said.
During a hearing of the Senate’s Proactive Response and Oversight for Timely and Effective Crisis Strategy Committee on Thursday, representatives from oil companies expressed support for the proposal, noting that removing the 12-percent VAT would translate more directly into lower pump prices.
Tanya Samillano, representing small oil players, said eliminating VAT simplifies price adjustments.
“If VAT is removed, it’s no longer part of the cost. That makes it easier for us to immediately implement reduced prices,” Samillano said.
Aquino urged the Department of Finance to help quantify the potential savings for consumers, emphasizing the need for data-driven policy decisions.
He said the Senate is prepared to act swiftly on the proposal if endorsed by economic managers.
Aquino also highlighted his role as co-author and co-sponsor of Republic Act 12316, which grants the president emergency powers to suspend or reduce excise taxes on petroleum products.
If fully implemented, the law is expected to:
– Reduce gasoline prices by up to P10 per liter.
– Lower diesel prices by around P6 per liter.
– Cut liquefied petroleum gas prices by P3 per kilogram.
– Slash kerosene prices by about P5 per liter.
Another senator, Sherwin Gatchalian, raised concerns over potentially excessive profits of oil companies as global fuel prices surge.
In a chance interview, Gatchalian criticized the pricing mechanism used by oil firms, particularly the “replacement cost” method, which bases pump prices on current market rates rather than the actual, often lower, cost at which existing inventory was purchased.
“These are old inventories. They should be priced using a first-in, first-out basis,” he said. “But because the industry is deregulated, the Department of Energy cannot see how much these companies actually paid for their supply.”
Gatchalian said the absence of transparency in procurement costs makes it difficult for regulators to determine whether oil firms are guilty of profiteering.
“If we knew how much they bought it for and how much they sold it for, we could easily determine their margins,” he said.
This opacity has fueled speculation, including claims raised by Sen. Rodante Marcoleta, that oil companies could be earning as much as P3 billion daily.
Gatchalian acknowledged that the estimate was plausible, though unverified.
“I haven’t computed it myself, but it’s not far-fetched to say profits are already very large,” he said.
He said the Philippine Competition Commission has been directed to monitor the industry for signs of anticompetitive behavior and profiteering.
“There are multiple mechanisms. We can check for anticompetitive conduct or intentional profiteering. Monitoring is critical because it’s hard to believe there are no excess profits in this situation,” he said.
On the possibility of joint oil and gas exploration with China in the West Philippine Sea, Gatchalian said both sides must demonstrate sincerity while respecting Philippine sovereignty.
With fuel prices still climbing, he underscored the need for decisive government action — both in regulating industry practices and securing a stable supply.
