Up to P1.50/liter oil price rollback seen next week

MANILA, August 1 ------ Domestic fuel prices are expected to decline by as much as PHP1.50 per liter in the first week of August, despite supply risks stemming from the ongoing conflict between the United States and Iran.

Based on price movements during the first four trading days of the week, Jetti Petroleum President Leo Bellas said on Friday that diesel prices could be rolled back by PHP0.50 to PHP1.00 per liter next week, while gasoline prices may fall by PHP1.00 to PHP1.50 per liter. This is significantly lower than this week's fuel price increases of up to PHP7.30 per liter.

Bellas said the price of Brent crude declined early this week after jumping to over USD100 per barrel last week “as cautious optimism over the US-Iran truce outweighed geopolitical risk.” Although crude prices have declined, “supply risks remain high due to still-limited flows from the region through the Strait of Hormuz,” he said, noting that “prices once again surged as tensions escalated after airstrikes resumed in the Middle East.” “Dwindling US oil inventories further added to supply worries,” he said.

Price hikes were, on the other hand, partly offset by “a proposed coalition to boost maritime defense around the Red Sea, to be led by Saudi Arabia”, which got the backing of 14 Arab states, he said. “Refined products prices, however, did not fall as quickly due to tight supply. Both diesel and gasoline products face further potential supply tightness as geopolitical tensions continue to disrupt regional refinery operations,” Bellas said.

In Asia, diesel prices “continued to get support from Middle Eastern and Russian supply risks.” “Limited gasoline exports from China, following mixed signals on geopolitical tensions across the Middle East resurfaced, and continuing Russian export bans have kept the global gasoline markets tight and sustained the relatively stronger price level,” Bellas added.

Source: pna.gov.ph