Philippine fuel retailers cut gasoline prices as diesel costs rise

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Philippine fuel price changes

Highlights

Gasoline prices in the Philippines drop by P4.30 per liter, while diesel rises by P2.60 per liter and kerosene falls by P1 per liter, effective Tuesday, Oct. 20.
Weaker demand and higher U.S. gasoline inventories pressure gasoline prices down, while Brent crude climbs to $110 a barrel on Middle East supply concerns.
International Energy Agency stock releases, a U.S.-Russia diesel deal, and renewed Chinese fuel exports help mitigate immediate diesel supply pressures despite this week's price increase.

DOE-guided price adjustments take effect Tuesday

As reported by BusinessWorld, citing the Department of Energy, gasoline prices are set to decline by P4.30 per liter this week, while diesel prices are set to increase by P2.60 per liter and kerosene is set to fall by P1 per liter.

In an advisory issued on Monday, the DoE said the adjustments reflect movements in the global oil market amid ongoing developments in the Middle East that are affecting supply and prices. Seaoil Philippines, Inc. and Shell Pilipinas Corp. are implementing the new prices starting Tuesday, Oct. 20.

The shift ends three straight weeks of declines for diesel, while gasoline and kerosene are set to drop after two consecutive weeks of increases. Pump prices in Metro Manila and nearby areas are reaching as much as P101.1 per liter for gasoline, P102.77 for diesel plus and P145.34 for kerosene.

Supply trends shape outlook for Philippine pump prices

Jetti Petroleum, Inc. President Leo P. Bellas said the drop in gasoline prices is driven by weaker demand and improving supply in Asia. He added that larger-than-expected U.S. gasoline inventories are adding bearish pressure to prices by signaling softer consumption.

At the same time, Bellas said Brent crude touches $110 a barrel for the first time since May as concerns grow that escalating tensions in the Middle East could tighten supply further. Despite the rise in diesel prices this week, he said planned stock releases by International Energy Agency members, a U.S.-Russia diesel agreement and China's resumption of fuel exports are easing near-term supply pressure.

Our earlier article on oil prices reaching $110 a barrel described how the surge added to investor worries about inflation and the U.S. Federal Reserve’s policy path. We also noted that the jump in crude coincided with broader market volatility, prompting some investors to reassess risk exposure as higher energy costs threatened to keep financing conditions tighter for longer.

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