Brace Yourselves: Diesel Could Jump ₱15/Liter Next Week as Middle East Conflict Closes Strait of Hormuz
Filipino motorists and commuters are bracing for what could be one of the biggest fuel price increases on record. Based on three days of trading at the Mean of Platts Singapore, diesel could jump by ₱15 per liter, gasoline by ₱7 per liter, and kerosene by a staggering ₱28 per liter — all effective next Tuesday. The culprit: the escalating military conflict in the Middle East that has forced Iran to close the Strait of Hormuz.
Energy Secretary Sharon Garin said oil companies are "amenable" to staggered fuel price increases to soften the blow on consumers, though she stressed this is voluntary and companies absorb losses when they spread out hikes. The DOE will only know the final increase amounts by the weekend after five-day trading figures are finalized. Garin warned the public against panic-buying and hoarding fuel, saying it could distort the market and deplete reserves faster.
The Strait of Hormuz — through which 20% of the world's oil consumption passes — was closed after the US and Israel attacked Iran last weekend. S&P Global warned that if the strait remains closed for an extended period, oil prices could "escalate well over $100 per barrel," calling it potentially one of the greatest supply shocks in history. Almost all products transiting the strait go to Asian markets, hitting the Philippines directly.
Making matters worse, China has asked its largest oil refiners to halt new contracts for gasoline and diesel exports — and the Philippines imports roughly 30% of its diesel from China. The government is now moving to procure at least one million barrels of diesel through the Philippine National Oil Co. to cover an additional five days of supply. DOE officials are also hoping South Korea, which supplies about 40% of PH diesel imports, won't follow China's lead.
Economists at the Bank of the Philippine Islands say inflation may still stay within the BSP's 2-4% target range — but only if the conflict doesn't become protracted. If it does, expect higher transport fares, food prices, and a potential pause in BSP rate cuts. For now, the DOE's advice is simple: don't hoard, don't panic, and pray the strait reopens soon.
Source: Philstar
