The Department of Energy (DOE) expects diesel and kerosene prices to increase this week as renewed Middle East tensions continue to pressure global oil prices, while gasoline may either roll back or rise slightly.

For the July 14 to 20 adjustment period, diesel and diesel plus may increase by PHP 2.62 to PHP 4.62 per liter, while kerosene may rise by PHP 2.22 to PHP 4.22 per liter.

Gasoline products, including RON 91, RON 95, and RON 97, may move within a range of a PHP 1 per liter rollback to a PHP 1 per liter increase.

“The gasoline, there’s a two-peso range for gasoline. The adjustments will be between rollback of one peso to price hike of one peso,” DOE Secretary Sharon S. Garin said during a virtual press briefing on Monday (July 13).

Garin said diesel has a price hike range of PHP 2.62 to PHP 4.62 per liter, while kerosene has a price hike range of PHP 2.22 to PHP 4.22 per liter.

The DOE attributed the price pressure to renewed geopolitical tensions in the Middle East, including threats to navigation through the Strait of Hormuz, which Garin described as one of the world’s most critical energy trade corridors.

She said these developments placed upward pressure on international crude oil prices and consequently affected domestic pump prices.

“Because of the volatility of the market, the international situation or the situation in the Middle East remains volatile,” Garin said.

Despite the expected price hikes, the DOE said the country’s petroleum products remain at healthy inventory levels.

Based on the DOE Oil Industry Management Bureau’s inventory update as of July 10, the country had a total expected available supply equivalent to 47.87 days.

Gasoline supply stood at 48.17 days, diesel at 45.69 days, kerosene at 148.98 days, jet fuel at 80.09 days, fuel oil at 33.37 days, and liquefied petroleum gas (LPG) at 39.51 days.

Undersecretary Sandy Sales said gasoline supply increased by around five days from the previous week, while diesel supply rose by around three days.

“All the petroleum products have healthy inventory levels as of Friday,” Sales said.

Garin also said the DOE may shift back to announcing a specific fuel price adjustment figure instead of a price range if market volatility continues next week.

She said the move would help the government monitor fuel price movements more closely and ensure that pump price adjustments reflect actual international market changes.

Garin explained that the DOE derives fuel price adjustments by looking at international market prices, transportation, premiums, and other price components. The agency then averages these over five days and compares them with the previous period.

Garin said the DOE initially shifted to a range as oil markets began to calm down and to help ensure the viability of oil companies. However, she said prices remain volatile, prompting the department to consider returning to a definite adjustment number.

“We don’t want abuse. That’s why it’s easier to monitor and control for the DOE if the price is definite,” Garin said.

Can tighter fuel price guidance help protect consumers if global oil market volatility continues?

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