The Department of Energy is set to tighten fuel price guidance as tensions in the Middle East threaten to drive pump prices higher. The department's top official stated that renewed tensions in the region are putting upward pressure on global oil prices amid concerns over possible supply disruptions.
The official noted that threats to navigation through a critical energy trade corridor have underscored the vulnerability of global oil supplies, placing upward pressure on international crude oil prices and consequently affecting domestic pump prices. Oil prices surged more than 3% after renewed military strikes reignited concerns over energy shipments.
The Department of Energy will no longer set a fixed range for fuel price adjustments due to volatile market conditions. Instead, a specific number will be prescribed to reflect the current market situation. This change is expected to take effect next week.
For the current week, the department has given a range of price adjustments that will take effect. Fuel retailers can implement a rollback of at least P1 per liter or an increase of up to P1 per liter for gasoline. Prices of diesel and kerosene are set to increase by up to P4.62 and P4.22 per liter, respectively.
Some fuel retailers have announced price increases, with gasoline rising by P1 per liter, diesel by P4.60 per liter, and kerosene by P2.30 per liter. The Department of Energy has been prescribing a range for weekly fuel price adjustments since a national energy emergency was declared.
The Philippines is particularly vulnerable to global oil price shocks due to its reliance on imported petroleum products, mostly from the Middle East. The conflict in the region has heightened concerns over possible disruptions to oil shipments, raising supply risks and driving up global crude prices.
An industry expert noted that recent escalations in the Middle East and persistent risks from the Russia-Ukraine conflict continue to cloud the outlook for the global oil market. These developments could make global oil prices and local pump prices volatile in the near term.
The country's fuel inventory currently stands at 47.84 days, increasing from 46.50 days previously. The average inventory for gasoline is 48.17 days, while diesel has an average inventory of 45.69 days.
