‘Iran deal won’t reduce fuel prices’

MANILA, Philippines —  Fuel prices are expected to remain high in the Philippines, as the ceasefire declared by US President Donald Trump is unlikely to be felt at domestic pumps, industry experts said yesterday.

While easing tensions in the Middle East could help temper global oil prices, Jetti Petroleum president Leo Bellas said fuel costs may remain high due to unchanged supply conditions.

He said Filipinos could get a break from consecutive fuel price hikes next week, with the possibility of either no adjustment or even a rollback.

“However, markets may bounce back in a day or two after digesting the extent of the current damage to infrastructure, the lead time to restore production and exports and after assessment of the strength or fragility of this declared ceasefire,” Bellas told The STAR yesterday.

Trump said he has agreed to hold off attacks against Iran for two weeks in exchange for Tehran reopening the Strait of Hormuz, through which around 20 percent of the world’s oil and gas supplies pass.

The ceasefire was announced just two hours before a deadline Trump had set for Iran to open the critical maritime chokepoint or face the destruction of its “whole civilization.”

“The ceasefire is a positive signal and may help ease global oil prices, but since it’s temporary, volatility will likely remain,” said Brigitte Carmel Lim, senior vice president and COO of Top Line Business Development Corp.

“For local pump prices, unfortunately, this won’t be felt immediately. There’s usually a one- to two-week lag before global movements are reflected at the pumps,” Lim added.

New normal

Former energy officials also cautioned that elevated fuel prices could last for several months, with a potential “new normal” settling at around P100 per liter.

Energy Secretary Sharon Garin said pump prices are unlikely to drop as quickly as they rose, citing severe damage to energy infrastructure in the Gulf region.

“Even if the war ends, the impact on prices will linger due to the extensive damage to critical energy facilities,” Garin said at a press conference on Tuesday.

Over a month since the conflict erupted in late February, diesel prices have surged to as high as P170 per liter, while gasoline is nearing P120 per liter. Demand has also dropped by an estimated 20 to 25 percent as consumers cut back.

Former DOE undersecretary Jay Layug, now an executive board member of the Philippine Energy Research and Policy Institute, also said the conflict shows no signs of ending soon.

“I don’t think the war will end by December, from the looks of it, so we will be facing high oil prices,” Layug said. “And this time – unlike in 2011, when I was still at the DOE – the war is even wider in magnitude. We’re talking about not just Iran and the United States; United Arab Emirates, Bahrain, Qatar – all are involved. Yemen even fired some missiles the other day.”

Still, former energy secretary Alfonso Cusi said the ceasefire and reopening of the Hormuz Strait could halt the recent surge and lead to gradual reductions in the coming weeks if the truce holds.

“The ceasefire and opening of the Hormuz Strait will put a break on the continuous increase of the price of oil over the past weeks,” Cusi, who served as energy chief during the Duterte administration, told The STAR in a message yesterday.

“I think we won’t see a substantial decrease in prices domestically next week, but we will see a gradual reduction in the coming weeks, especially if the ceasefire holds,” he added, noting that diesel might not reach P200 per liter if the Philippines can secure energy supplies from oil-producing countries outside the Middle East and the Hormuz Strait remains open.

Global benchmarks showed initial relief, with Brent crude and West Texas Intermediate falling below $100 per barrel following the ceasefire announcement.

Supply strain

The impact of soaring fuel prices is being felt across the country, with 393 fuel stations temporarily shutting down due to lack of supply, according to the Philippine National Police.

The figure represents 2.7 percent of the country’s 14,519 fuel stations and is higher than the 370 closures recorded a day earlier.

The Cordillera Administrative Region recorded the highest number of closures, followed by Cagayan Valley and Bicol. Seven stations in Metro Manila have suspended operations.

Rising fuel costs have also forced major cutbacks in key sectors.

In the Ilocos Region, about 45 percent of public utility vehicles have stopped operating due to mounting expenses, according to the Land Transportation Office.

Authorities have begun offering free rides on selected routes to assist commuters.

Fisherfolk have also been severely affected, with about 50 percent of communities in Luzon halting operations, according to the Samahang Industriya ng Agrikultura.

The group said catches have dropped to just five to 10 kilograms per trip due to limited resources, while existing fuel subsidies remain insufficient.

“We’re not counting weeks or months; we are counting days. They will suffer if this continues without comprehensive and targeted support,” SINAG executive director Jayson Cainglet said.

Authorities have also recorded 15 incidents of fuel hoarding and profiteering since the crisis began, leading to 34 arrests.

In a separate operation, six individuals were arrested in San Pablo City, Laguna for alleged hoarding and illegal sale of petroleum products.

Police seized a tanker containing 500 liters of fuel, along with containers, steel drums and other equipment worth P3.51 million.

Due to these incidents, enforcement agencies have stepped up operations against fuel hoarding and pilferage.

The Philippine Coast Guard has intensified monitoring and seaborne patrol operations nationwide to prevent fuel pilferage, locally known as “paihi,” which involves siphoning fuel from tankers at sea.

PNP chief Gen. Jose Melencio Nartatez Jr., for his part, stressed that illegal activities involving fuel will not be tolerated.

“No one should sell or hoard fuel for personal gain in the middle of a national energy emergency,” he said.

Price cap

To help cushion the impact on consumers, the Department of Energy (DOE) is pushing for legal authority to impose temporary fuel price caps during extraordinary crises.

Appearing before a multi-panel House hearing, Garin suggested it would be best if the government could “dictate on prices” during crises of global scale to protect citizens.

When asked by Navotas Rep. Toby Tiangco if the DOE needs “additional powers during times like this,” Garin again replied affirmatively, citing Executive Order 110 declaring a national energy emergency.

The hearing, conducted by Speaker Faustino Dy III and 13 House committees, sought to explore measures Congress could take to ease the burden of rising fuel and commodity prices. –  EJ Macababbad, Emmanuel Tupas, Evelyn Macairan, Josiah Antonio, Delon Porcalla