Global oil prices stabilizing; local pump prices to drop next week
The Philippine economy has so far been insulated from the impact of the Israel-Iran conflict, easing the urgency of the need to provide fuel subsidies to the transport and agriculture sectors, President Ferdinand Marcos Jr. said on Wednesday
World oil markets have now shown relative calm after the reflex spike in prices when the Israel-Iran conflict peaked with the US bombing of Iran’s nuclear facilities and then tumbled immediately after US President Donald Trump announced a ceasefire between the warring countries.
And despite the fragile truce between the warring nations, oil prices are now expected to stabilize, barring the eruption of new hostilities in the Middle East.
World oil prices inched up on Wednesday as investors assessed the stability of a ceasefire between Iran and Israel, while support also came from data that showed US demand was relatively strong, Reuters reported as of about 1030 GMT+8 on the same day.
Brent crude futures were up 48 cents, or 0.7 percent at $67.62 a barrel, while US West Texas Intermediate (WTI) crude was up 44 cents, or 0.7 percent at $64.81.
‘No significant effect’
Speaking to reporters in Capas, Tarlac, President Marcos said his economic team had reviewed the possible ripple effects of the Middle East war, particularly on energy markets, but found “no significant effect” for the time being.
“We saw that the effect on the economy should be manageable. Of course, there is an impact if oil prices rise, but so far, there’s no need for alarm,” Marcos said. “The price of oil has not gone up. It went up for one day, then came back down.”
Crude prices briefly spiked to $79 per barrel amid fears of escalation of the war, but fell back to about $69 after a US-brokered ceasefire between Israel and Iran took hold.
The government had prepared to release P2.5 billion in cash aid for public transport drivers and P600 million for farmers and fisherfolk if prices breached the $80 mark. That threshold, for now, has not been sustained.
Business as usual
Marcos, speaking to reporters in mixed Filipino-English, said with the drop in oil prices, there is no “need to distribute the fuel subsidies for now.”
“If oil prices don’t increase, then there’s no need for the subsidies,” Marcos added . “We can do business as usual.”
Department of Energy (DOE) Officer-in-Charge Sharon Garin confirmed the fuel subsidy remains on standby, but added: “The release will depend on global price movements.”
Garin said in January this year, the government released such cash aid, but it was triggered only after crude surpassed $80 per barrel amid a cold snap and sanctions on Russia and Iran.
Prices could ‘drop next week’
Preliminary market data already point to a possible drop in pump prices next week.
Jetti Petroleum Inc. President Leo Bellas said diesel could drop by P0.80 to P1.10 per liter, while gasoline may either slightly increase by P0.10 or fall by P0.20, based on the Mean of Platts Singapore (MOPS) benchmark used by local oil players.
“The drop reflects easing war-related premiums and better trading fundamentals,” Bellas noted. Still, he warned that prices could shift again depending on MOPS results in the week’s remaining trading sessions.
DOE data as of June 23 pegged average retail prices at P55.90 for gasoline, P53.40 for diesel, and P70.22 for kerosene. Retailers had staggered this week’s hikes in response to earlier global surges, with the first round raising gasoline by P1.75, diesel by P2.60, and kerosene by P2.40 per liter. A second round of adjustments took effect today, June 26.
On-site inspections
To protect consumers during these fluctuations, the DOE has launched intensified on-site inspections of fuel stations. Garin, accompanied by Oil Industry Management Bureau officials, led visits to gas stations in Taguig City on Wednesday to check compliance with quality and quantity standards.
“We collect samples for lab testing and check pump calibration, permits and fuel quality. These inspections are both routine and surprise,” she said.
Violations—such as inaccurate dispensers or expired permits—could result in sanctions or business permit revocations in coordination with local governments, the DOE warned.
While the Middle East situation remains “fragile but holding,” Bellas said refined fuel prices in Asia are now likely to be driven more by seasonal demand and supply-side recovery as refineries resume operations.
