After three-week rollback run, fuel prices expected to climb again

National

JUST as drivers were starting to feel some relief from recent rollbacks, pump prices may be heading back up next week, driven by renewed instability in global oil supply chains.

An industry source told Philstar that diesel may go up by around P1 to P2 per liter, while gasoline could rise by P2 to P3 per liter in the next adjustment cycle.

The projection was based on the four-day average of the Mean of Platts Singapore, the regional benchmark for refined petroleum products, with the shortened trading week due to the Labor Day break also factored in.

Price adjustments are expected to be announced on Monday and implemented the following day.

Global oil markets continue to face pressure from supply risks, particularly tensions in the Strait of Hormuz, a key passageway for roughly 20 percent of global oil and gas shipments. Continued geopolitical friction involving Iran, along with heightened military activity in the region, has kept uncertainty elevated among traders.

Sentiment was further affected by recent US data showing a sharper-than-expected drawdown in crude and fuel inventories, reinforcing upward price momentum.

The source noted that these developments contributed to the latest market rally, with tighter supply conditions feeding into global benchmarks.

If the expected increase pushes through, it would end three straight weeks of diesel price rollbacks. In the most recent adjustment last Tuesday, diesel prices dropped by at least P12.94 per liter, while gasoline increased by up to P0.53 per liter.

For three weeks, the Department of Energy has implemented limits on fuel price movements, setting both ceilings for hikes and floors for rollbacks in an effort to smooth domestic volatility.

As prices begin to stabilize, former energy secretary and Leyte Gov. Jericho Petilla said government intervention in pricing may no longer be necessary. He warned that continued mandated adjustments could place pressure on smaller oil players and potentially disrupt their operations.

He also raised the idea of a more direct government role in retail fuel through the Philippine National Oil Co. (PNOC), both as a pricing benchmark and as a mechanism to improve fuel subsidy delivery for transport workers.

“What will PNOC do? It will import. It will have gas stations,” he said in the article.

Petilla said a state-run fuel retailer could operate alongside private firms, with market competition helping determine prices and consumer choice. He also argued that government retail operations could help define fair pricing levels without necessarily distorting the market.

On subsidies, Petilla suggested channeling assistance through PNOC to simplify distribution. He said such a system would allow faster transfer of funds for transport workers needing support, while also reducing administrative delays.

However, concerns remain over fiscal space for such an initiative.

Former energy undersecretary Jay Layug cautioned against expanding government participation in downstream oil operations, citing budget limitations.

“Based on the current fiscal space, the current budget portfolio that we have, engaging in downstream oil is not easy,” Layug, now executive board member of the Philippine Energy Research and Policy Institute, said in the same report.

He also stressed that operating fuel stations with thin margins may not generate sufficient returns to sustain a large-scale government retail program.(MyTVCebu)