Fuel prices poised for another rollback

INQUIRER FILE PHOTO / GRIG C. MONTEGRANDE

Motorists may get another round of relief next week as pump prices are expected to decline further, tracking lower global oil prices and a stronger peso.

Industry estimates showed diesel prices could be rolled back by P7.50 to P9.50 per liter, while gasoline prices may decrease by P3 to P5 per liter on June 23.

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READ: Diesel rollback may reach P9.50/liter next week

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The projections were based on the first four trading days’ average movements in Mean of Platts Singapore and foreign exchange rates from June 15 to 18, traders said on Friday.

The expected rollback comes after world oil prices softened this week as traders priced in the potential reopening of the Strait of Hormuz and the return of Middle Eastern crude supplies following an interim agreement between the United States and Iran.

The peace deal, recently signed by the leaders of both countries, gives negotiators 60 days to finalize a broader agreement, easing concerns over possible disruptions in global oil supply.

“Reinforcing the easing of diesel and middle distillate prices is the availability of replacement flows that helped reduce immediate market tightness as Asian refiners managed to secure alternative crude feedstock, allowing them to support higher refined product output despite ongoing disruptions linked to the loss of Middle Eastern supply,” Jetti Petroleum president Leo Bellas said.

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Plugging gaps

Gasoline prices likewise weakened as refineries resumed operations after planned maintenance shutdowns. Some Asian refiners also managed to source crude supplies from outside the Middle East, helping plug supply gaps and improve product availability.

Market participants noted that while fuel demand remains strong and inventories relatively low, the additional supply has helped temper price pressures.

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Meanwhile, the peso’s strengthening against the US dollar further contributed to the projected decline in domestic pump prices by reducing the cost of imported fuel products.

Earlier this week, a Department of Energy official said local fuel prices could return to pre-Middle East conflict levels within six months to a year if the US and Iran reach a final agreement to end the war.

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