Fuel price rollback seen

MANILA, Philippines — Expect a slight rollback in pump prices next week if the fragile ceasefire between Israel and Iran holds and calms the situation in the Middle East, an industry expert said yesterday.

Following two days of shaky trading in the global oil market, Jetti Petroleum president Leo Bellas estimates a rollback of P0.80 to P1.10 per liter for diesel prices.

Gasoline prices, meanwhile, may either climb by P0.10 or decline by P0.20 per liter next week, he said.

“The decline in prices started with the easing of war risk premium on crude oil following the de-escalation of the (Israel-Iran) conflict,” Bellas said.

He said global oil prices dropped further following a ceasefire between Israel and Iran, which alleviated fears of supply disruption in the Middle East.

Bellas, however, clarified that the initial indication of domestic price movement may still change, depending on the outcome of trading in the next three days.

“While tension has de-escalated, the situation in the Middle East is still fragile but holding so far. Crude oil prices could be range-bound in the coming days,” he said.

For this week, oil firms agreed to implement fuel price hikes on a staggered basis to soften their blow on motorists as diesel prices surged by over P5 per liter.

Gasoline, diesel and kerosene prices increased by P1.75, P2.60 and P2.40 per liter on Tuesday, respectively.

A second wave of identical increases, meanwhile, is set to follow today, bringing this week’s total hike for gasoline, diesel and kerosene to P3.50, P5.20 and P4.80 per liter, respectively.

To ensure compliance with the agreed staggered pricing mechanism, Department of Energy (DOE) officials yesterday conducted on-site monitoring activities at retail fuel outlets in Taguig.

“Filipino consumers deserve not only access to fuel but also fair and honest treatment at the retail price level,” DOE officer-in-charge Sharon Garin said.

Monitoring

In Capas, Tarlac where he led the destruction of more than P9 billion worth of recovered illegal drugs, President Marcos said the government is monitoring the unreasonable increases in the prices of goods, as concerns over the economic impact of the volatile situation in the Middle East persist.

Marcos said that while the conflict between Israel and Iran has no significant effect on the Philippine economy for now, there have been upward adjustments in the prices of commodities.

“The effect on the economy should be manageable. Of course there will be an effect somehow if the price of oil rises,” the President said.

“So far, there is no effect. So, there is no significant effect on the economy. What we are watching now is the price gouging. Because I have seen many price hikes, but the price of oil did not increase,” he added.

Price gouging refers to the unreasonable raising of prices of basic necessities and essential services during a state of emergency, disaster and other unpredictable situations. Basic necessities and prime commodities include canned food products, bottled water, dairy and common kitchen or household supplies.

Marcos said a ceasefire between Israel and Iran was announced before his meeting with economic managers on the Middle East situation last Tuesday. The ceasefire, which was disclosed by US President Donald Trump, eased tensions and reversed the oil price increases.

Marcos noted that the price of oil, which rose to $79 per barrel, dropped to $69 per barrel after the announcement.

Despite the easing of tensions brought about by the ceasefire, the government is preparing for a possible distribution of subsidies to farmers and transport workers – sectors that are vulnerable to price spikes – as the situation in the Middle East remains unpredictable.

The subsidies, which are intended to cushion the impact of price hikes on agriculture and transport workers and consumers, would be given if the oil price breaches the $80 per barrel mark.

“If the price of oil did not increase, then there is no need for that. We can proceed – we can do business as usual,” Marcos said.

No talk on subsidies

Asked for his reaction to transport groups’ claim that the giving of subsidies is not enough to address the effects of oil price hikes, the President said: “The price of oil has not gone up. So, we do not need to talk about the subsidy yet.”

“It (oil price) went up for one day, then it came back down,” he added.

But Vice President Sara Duterte said Marcos’ response to the Middle East crisis was “too little, too late,” as he was reportedly busy politicking.

“Well, it’s too little, too late, again. The moment missiles were released, the government has already put in place plan of actions on what should be done for Filipinos who want to be repatriated,” Duterte said at a press conference.

Duterte noted that the government should not have waited for borders and airspaces to close before acting to repatriate Filipinos wishing to go home.

“This could have been planned before hand as this (war between Iran and Israel) was not surprised,” Duterte added.

“We all know that all of these would happen as the two are already fighting. It is not a surprise in the whole world. The spike in the prices of crude oil is not a surprise as well. We always have this situation in the Middle East. It is really difficult to plan the unexpected. Those we already expect, we should have plans for these so that if it happens, the action of the government is fast,” she said.

Senate President Francis Escudero, meanwhile, has called for an amendment to the Tax Reform for Acceleration and Inclusion (TRAIN) law to give the Department of Finance (DOF) standby authority to lower the value-added tax (VAT) on fuel in case of a price hike.

“In the original version of the TRAIN law, I had proposed giving the DOF a standby authority to lower the VAT on petroleum products,” Escudero said at a briefing yesterday.

“I feel like it’s wrong to impose that on the public so that the government will generate more revenue outside its projected income for that year,” he added, referring to VAT on fuel.

Escudero said there is a need to revisit his proposed amendment so that the government can control the pump prices caused by the escalating Middle East conflict between Israel and Iran.

For his part, Sen. Sherwin Gatchalian said he was marking the observance of the Day of the Filipino Seafarer by calling for their protection amid the Israel-Iran conflict.

“The celebration of the Day of Filipino Seafarers offers a stark reminder of the government’s duty to protect their rights and welfare, especially amid growing tensions in the Middle East,” Gatchalian said.

“As seafarers play a crucial role in the global economy, they now face greater risks and dangers, particularly with the Israel-Iran conflict affecting vital shipping lanes like the Strait of Hormuz,” he added. - Alexis Romero, Bella Cariaso, Marc Jayson Cayabyab