Philippines fuel retailers face steep gasoline price rollback as global crude eases

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Philippines steep gasoline price rollback

Highlights

Gasoline prices in the Philippines will drop by P16.80 per liter, with diesel and kerosene decreasing by P4.10 and P3.70 per liter, respectively, due to lower global crude prices.
Pump prices in the National Capital Region following the rollback will range from P61.70 to P87.50 per liter for gasoline, P84.40 to P96.90 for diesel, and P111.30 to P140.24 for kerosene.
The Department of Energy and Philippine National Oil Co. will establish a strategic petroleum reserve with an initial storage capacity of one million barrels to enhance supply security.

Price cuts reflect global oil market retreat

As reported by BusinessWorld Online, the Department of Energy said on Monday that gasoline prices are set to fall by P16.80 per liter, while diesel and kerosene prices are expected to decline by P4.10 and P3.70 per liter, respectively. Energy Secretary Sharon S. Garin said the rollback is driven by lower international crude oil prices amid expectations that tensions involving the U.S. and Iran may ease.

The latest adjustment marks a steep decline in gasoline prices, while diesel and kerosene are on track for a second straight week of rollbacks. In the National Capital Region, the price changes will bring gasoline pump prices to a range of P61.70 to P87.50 per liter, diesel to P84.40 to P96.90 per liter, and kerosene to P111.30 to P140.24 per liter.

Ms. Garin said the move underscores the limited ability of the Philippine government to directly control fuel prices because oil is traded internationally and priced by the global market. She also said it remains difficult to project fuel costs for the rest of the year, given that price movements depend on developments involving Iran as well as broader geopolitical conditions, while the peso would also need to recover to pre-conflict levels before domestic pump prices return to earlier levels.

Reserve planning aims to cushion supply risk

The Philippines imports about 98% of its crude oil requirements from the Middle East, leaving domestic fuel prices highly sensitive to swings in global oil markets. The conflict involving the U.S., Israel and Iran has disrupted oil flows and increased supply concerns, contributing to volatility in crude prices, although oil came under pressure after the Democratic Party's strong showing in recent U.S. midterm elections raised expectations of possible de-escalation.

According to the Department of Energy, the government is moving ahead with plans to establish a strategic petroleum reserve. Energy Undersecretary Alessandro O. Sales said Philippine National Oil Co. has decided to proceed with storage facilities with an initial capacity of one million barrels of crude oil, after the state-run company had earlier explored a possible partnership with Maharlika Investment Corp. to help fund the infrastructure.

Mr. Sales said the government is also evaluating a ticketing system under which the Philippines would purchase reservations for crude oil or petroleum products to secure supply. As of Nov. 6, Department of Energy data show the country's fuel inventory is sufficient to cover average daily demand for about 50.33 days, including 51.64 days for gasoline, 53.95 days for diesel, 143.07 days for kerosene, 55.62 days for jet fuel, 55.97 days for fuel oil and 29.84 days for liquefied petroleum gas.

Our earlier report on the surge in crude oil shipping costs explained how conflict-related risks around key routes like the Strait of Hormuz and the Red Sea sharply raised tanker and insurance rates, turning freight into a major component of oil pricing. We also noted that import-dependent countries, including the Philippines, are especially exposed because higher transport costs can quickly filter through to pump prices and broader consumer inflation.

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