Fuel rollback seen possible next week after Iran truce

SOME RELIEF from consecutive fuel price increases could be coming as early as next week as global fuel prices tracked downward after the US announced a two-week ceasefire in its war against Iran, industry officials said.

Bri-gitte Car-mel C. Lim, senior vice-pres-id-ent and chief oper-at-ing officer of Top Line Busi-ness Devel-op-ment Corp., a Cebu-based fuel distributor, said there are strong indications of a rollback next week based on the trends in the first three days of trading this week.

“However, we usually wait for full-week trading before confirming, as market movements can still change,” Ms. Lim told BusinessWorld. “We remain hopeful that the downward trend continues.”

An industry official who declined to be identified told BusinessWorld that initial projections show gasoline prices could drop by as much as P2.50 per liter next week, while diesel may either remain unchanged or fall by P1.

The estimates were based on the three-day trading of the Mean of Platts Singapore (MOPS), a benchmark used for refined oil products.

“MOPS prices and premiums have softened due to the ceasefire deal in the Middle East. However, modest rebounds are seen based on today’s projections,” the source said.

Global markets, particularly those heavily dependent on imported oil such as the Philippines, continue to face volatility in both supply and prices amid the ongoing disruptions in the Middle East and the Strait of Hormuz.

US President Donald J. Trump said the US will stop attacking Iran for two weeks, hours before his deadline for Tehran to reopen the waterway.

In a hearing on Wednesday, Energy Secretary Sharon S. Garin said that it is remains difficult to predict how the ceasefire will impact fuel prices.

“I think the problem will be stay longer than the war itself. It will take some time (before prices) go back to P100 (per liter) or below,” Ms. Garin told legislators.

Fuel companies carried out another round of price increases this week, with increases ranging from P15-P19.80 per liter for diesel and P1.50-P5.90 per liter for gasoline. 

According to global energy price database Global Petrol Prices, the Philippines posted some of the largest increases in gasoline and diesel prices since the outbreak of fighting in the Persian Gulf.

Ms. Garin has said prices may not immediately retreat due to the extensive damage to energy infrastructure in the Middle East, particularly Qatar.

“The speed of the increase in pump prices will not be the same as the drop in prices. In fact, it will be way, way slower (because of the infrastructure damage),” she said. — Sheldeen Joy Talavera