Diesel fuel prices might reach P200 per liter
It’s been 24 days since the destructive war in the Middle East began. And Trump may have issued a five-day halt on US military strikes on Iranian soil. Yet, still the effects on energy crises, particularly fuel prices have been catastrophic.
Hence, the rest of the world continues to suffer.
Here in the Philippines, according to the Department of Energy, diesel prices, pre-war, only ranged from P47 to P72 per liter, now it has ballooned to P144 (in some areas) –or more than 200-percent increase.
Gasoline, on the other hand, the same story, catapulting from a P50 to P74 per liter range in early January to—we don’t want to even mention it anymore.
Now, there are talks that diesel fuel prices can even hit P200 per liter, if we don’t stop the bleeding.
Why diesel is more expensive
According to sources, diesel fuel nowadays is more expensive than gasoline due to a number of reasons.
First, diesel is the lifeblood of transport and logistics, which powers heavy-duty trucks, shipping, agriculture, and construction equipment–hence the high global demand. Low inventory levels and increased demand for low-sulfur diesel have also caused a supply-demand imbalance.
Next, the war in the Middle East has even added fuel to the fire tenfold–as fears of shortages skyrocket.
Saudi Aramco’s Ras Tanura, the world’s largest crude export terminal was shut down after a drone strike. Qatar’s LNG facilities, also one of the world’s biggest, are facing force majeure. At the Strait of Hormuz, tankers continue to pile up on both sides and traffic there is at a standstill.
Moreover, what makes diesel more expensive are the additional refining treatments needed for environmental regulations.
These are practically the major causes for steep diesel fuel prices, if not fuel prices in general.
Local scenario
Although 97 percent of our country’s refined petroleum product imports come from Asia–still–these neighboring countries get their supplies from the tankers passing through the Strait of Hormuz. In short, the brunt we’re feeling now is a result of a domino effect.
What our government is doing to mitigate this crisis is provide fuel subsidy programs, price freezing on basic and prime commodities, supply chain inspections, among many others.
The question is: For how long?
The only time that it will reach P200 per liter for diesel, reports say, is for the Mean of Platts Singapore (MOPS) for diesel surging up to more than $300 per barrel.
MOPS is the daily average of refined petroleum product price assessments (gasoline, diesel, kerosene) published by Platts in Singapore, the key trading hub for Asia-Oceania. This serves as the primary benchmark for setting local pump prices and importing petroleum products into the county.
Better brace yourselves in the coming days.
