DoE sees jumbo rollback in gasoline prices of at least P16 a liter this week

By Sheldeen Joy Talavera, Reporter

MOTORISTS can expect a sharp drop in pump prices this week, with gasoline set for a rollback of as much as P16.80 per liter as international oil prices retreat on expectations of easing tensions involving the US and Iran, the Department of Energy (DoE) said on Monday.

“[The rollback] was due to the decline in international crude oil prices amid expectations of easing tensions between the US and Iran,” Energy Secretary Sharon S. Garin told a news briefing.

Gasoline prices would fall by P16.80 per liter, while diesel and kerosene prices would drop by P4.10 and P3.70 per liter, respectively, she added.

The reductions mark a sharp decline in gasoline prices, while diesel and kerosene prices will post a second straight week of rollbacks.

The adjustments will bring down pump prices in the National Capital Region, with gasoline prices ranging from P61.70 to P87.50 per liter, diesel from P84.40 to P96.90 per liter, and kerosene from P111.30 to P140.24 per liter.

The Philippines imports about 98% of its crude oil requirements from the Middle East, making domestic fuel prices highly sensitive to movements in global oil markets.

The conflict involving the US, Israel and Iran has disrupted oil flows and heightened concerns over supply, contributing to significant volatility in international crude prices.

Oil prices came under pressure after the Democratic Party’s strong showing in the recent US midterm elections fueled expectations that efforts to de-escalate the conflict could gain momentum.

Crude prices fell by more than 8% on Nov. 4 as investors anticipated a lower risk of further escalation in the Middle East, according to a Reuters report.

“It merely shows that the control or determination of fuel prices is not within the power of the Philippine government, as these are internationally traded commodities whose prices are determined by the global market,” Ms. Garin said.

Despite the decline in oil prices, she said it remains difficult to forecast fuel costs for the rest of the year because market movements depend not only on developments involving Iran but also on broader geopolitical conditions.

She added that local fuel prices would take time to stabilize, noting that the peso would also have to recover to pre-conflict levels before domestic pump prices return to earlier levels.

Meanwhile, the government is moving forward with plans to establish a strategic petroleum reserve to cushion the country from supply disruptions.

Energy Undersecretary Alessandro O. Sales said Philippine National Oil Co. (PNOC) had decided to proceed with plans to develop storage facilities with an initial capacity of one million barrels of crude oil.

The state-run company earlier explored a potential partnership with Maharlika Investment Corp. to help fund the construction of oil storage infrastructure.

Mr. Sales said the government is also evaluating a “ticketing” system, under which the Philippines would buy reservations for crude oil or petroleum products to secure supply.

“We are already talking to companies through PNOC and the DoE that are willing to enter into a ticketing arrangement so that we can secure reservations for the products that we need,” he said.

The country’s fuel inventory was sufficient to cover average daily demand for about 50.33 days as of Nov. 6, according to DoE data.

Gasoline inventories were equivalent to 51.64 days of demand, diesel to 53.95 days, kerosene to 143.07 days, jet fuel to 55.62 days, fuel oil to 55.97 days and liquefied petroleum gas to 29.84 days.