Diesel hike of up to P4/liter seen July 14

INQUIRER FILE PHOTO / GRIG C. MONTEGRANDE

Motorists should brace for another increase in diesel prices next week, with pump prices expected to rise by as much as P4 per liter, amid tightening global supply and renewed geopolitical tensions in the Middle East.

Industry estimates showed diesel prices could increase by P2 to P4 per liter on July 14, based on the first four trading days of the Mean of Platts Singapore and foreign exchange movements from July 6 to July 9.

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Gasoline prices, meanwhile, are expected to remain largely stable, with adjustments ranging from a P1-per-liter rollback or increase.

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The projected diesel hike reflects stronger prices for diesel and other middle distillates before the latest escalation in the conflict involving the United States, Israel and Iran.

Tightening supply

Firm demand and tightening physical supply have continued to support prices, while concerns over the possible loss of Russian diesel exports have added upward pressure as Ukraine intensified drone attacks on Russia’s energy infrastructure.

Asian gasoline prices, on the other hand, eased slightly during the period as ample regional supplies kept the market balanced despite steady demand.

Jetti Petroleum president Leo Bellas said that looking ahead, prices are likely to firm up as balances across global gasoline markets are tightening amid the peak Northern Hemisphere summer demand season and supply constraints due to refinery maintenance and run cuts.

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Iranian attacks

Oil prices received another boost after Iranian strikes on July 7 targeted vessels attempting to transit the Strait of Hormuz outside officially approved routes.

The attacks were followed by retaliatory US strikes and Washington’s decision to revoke sanctions relief for Iranian oil exports.

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Prices climbed further after the United States launched strikes on Iran on July 9, prompting Iran to retaliate with attacks on US infrastructure in neighboring Gulf states.

“The military strikes in the Middle East continue to expose the ongoing risk to supply and the latest escalation in the US-Iran war has dimmed the prospect of having a lasting peace deal,” Bellas said.

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Should the forecast hold, diesel users would face another significant increase at the pumps, while gasoline motorists are likely to see little change in fuel costs next week.