Nearly P11 Per Liter Diesel Price Hike Seen; P5 For Gas

Motorists should brace for another painful shock next week, with diesel prices poised for a double-digit increase as fears of tighter supplies mount.

Jetti Petroleum president Leo Bellas said diesel prices could rise by P10 to P10.50 per liter on Sept. 22, while gasoline prices may increase by P4.50 to P5 per liter.

The estimates are based on four-day movements in the foreign exchange rate and the Mean of Platts Singapore, the regional benchmark for refined petroleum products in Asia-Pacific markets.

Bellas said oil prices surged following recent attacks in the Strait of Hormuz and the Red Sea, two critical oil transit routes in the Middle East, a major supplier of diesel and crude grades suited for diesel production.

“Attacks on Saudi Arabia’s East-West pipeline, a key oil route bypassing the Strait of Hormuz, forced a shutdown of the system and triggered concerns that the loss of Saudi export capacity would severely affect global energy supplies,” he said.

Adding to the upward pressure were attacks on Russian refineries, another major source of diesel. These developments pushed diesel prices to record highs.

Meanwhile, Asian gasoline prices remained elevated, supported by firm regional demand and concerns that continued hostilities in the Red Sea could further disrupt supplies from the Middle East. 

The final domestic pump price adjustments would still depend on the outcome of this week’s last trading day.

Amid the ongoing energy emergency, however, oil companies are required to follow the maximum price increases prescribed by the Department of Energy (DOE).

P5-B fuel subsidy

The Department of Transportation (DOTr) has appealed to Congress to restore funding for its fuel subsidy program after the Department of Budget and Management completely excluded the agency’s request from the 2027 National Expenditure Program.

During the Senate finance subcommittee deliberations on the DOTr’s proposed budget, Sen. Bong Go, who attended the hearing virtually, pointed out the zero allocation, stating that the government must secure the funds proactively rather than scrambling for resources only when oil prices spike and public utility drivers complain.

“I noticed that no budget was included for fuel subsidy next year. It should have been given priority because we noticed that when fuel prices increase, when our countrymen complain, it’s only the time when government scours for funds, hurriedly looking for sources. The government should be ready, the DOTr, to give fuel subsidy. Every peso, every cent, is very important for our countrymen,” Go said.

Transportation Secretary Giovanni Lopez confirmed the unfunded request and backed Go’s call for intervention. Lopez explained that fuel subsidies are the immediate solution for transport operators during oil shocks.

Crisis response

The government is expanding its response to cushion the impact of rising fuel prices, Malacañang said.

Executive Secretary Ralph Recto convened the UPLIFT committee on Thursday, where agencies gave assurance of sufficient fuel stocks, continued cash assistance and other measures to support vulnerable sectors.

During the meeting, the DOE gave assurance that the country has sufficient fuel stocks. As of Sept. 14, inventories were equivalent to 57.2 days of gasoline, 60.8 days of diesel and 39.3 days of liquefied petroleum gas.

The Department of Social Welfare and Development, meanwhile, said it has sufficient funds to sustain cash assistance through the end of the year for the 7.5 million intended beneficiaries of the expanded UPLIFT program, including transport workers, farmers and fishers. 

For overseas Filipinos affected by the Middle East conflict, the Department of Migrant Workers said adequate funds remain available for further repatriation. 

The government has rejected calls from various groups to suspend or lift the value-added and excise taxes on diesel and gasoline for a broad-based relief for all sectors.

Business groups have said the high fuel prices raise logistics costs, which are passed on to consumers, fueling inflation, which negates the relief from targeted subsidies and cash handouts. 

Toll exemptions for provincial buses are being maintained, while the terminal fee waiver for public utility vehicles at the Parañaque Integrated Terminal Exchange (PITX) has been extended until the end of the year. Monthly terminal fees are also waived at 86 SM public transport terminals nationwide. 

Other commuter relief measures include 50-percent fare discounts on MRT-3 and LRT-2, the P1 roll-on/roll-off terminal fee and Libreng Sakay services.

The Department of Agriculture reported that 2.59 million beneficiaries have received a combined P6.03 billion in assistance under the Presidential Assistance for Farmers and Fisherfolk Program. 

The Department of Labor and Employment, for its part, said it is prepared to expand emergency employment assistance through the TUPAD program. – With additional reports from Helen Flores and Neil Jayson Servallos