Diesel, gasoline prices seen rising by up to P4.25 next week

August 15 ------ Pump prices of diesel and gasoline are expected to increase significantly next week amid higher global oil prices, an industry source said.

Based on the estimated movement using this week’s Mean of Platts Singapore (MOPS) prices and foreign exchange averages from August 10 to 13, the following are the possible price adjustments:

- Diesel - ₱3.75 to ₱4.25 increase

- Gasoline - ₱2.50 to ₱3.00 increase

The oil industry source attributed the increase to the rise in world oil prices as optimism over a possible peace deal and the near-term reopening of traffic through the Strait of Hormuz faded. Markets have grown more skeptical of negotiations, which have become more complicated by competing demands for compensation over the five-month conflict.

Concerns over the continued drawdown of global oil inventories have also supported prices in an already-tight market, amid constrained flows from the Middle East Gulf and reduced exports from the Black Sea. The possibility of sanctions-related disruptions has likewise raised concerns over further tightening of global crude supplies.

Diesel and gasoline prices surged as diplomatic efforts to reopen and normalize transit through the Strait of Hormuz stalled. The continued decline in global product inventories, partly due to refinery output disruptions, has also kept the market tighter than the crude market.

For gasoline, positive regional demand signals are providing additional support, although uncertainty remains over China's export volumes. For diesel, Middle East supply risks and constrained Russian exports continue to underpin prices. However, recent indications of weaker global demand and a buildup in US crude inventories have weighed on oil prices and could limit further increases. Fuel firms announce price adjustments every Monday, to be implemented on the following day.

Source: gmanetwork.com