MANILA – Domestic fuel prices are expected to increase by as much as PHP10.50 per liter next week following renewed military tensions in the Middle East, an industry official said.

In a message to journalists, Jetti Energy President Leo Bellas said diesel prices are projected to increase by PHP9.50 to PHP10.50 per liter, while gasoline prices could rise by PHP3.50 to PHP4.50 per liter, based on price movements during the first four trading days of the week.

Bellas said crude oil prices climbed due to heightened geopolitical risks following recent military exchanges involving Iran and the United States.

He said the increase was “mainly supported by an elevated geopolitical risk premium, which rebuilt after Iranian attacks on commercial ships attempting to transit the Strait of Hormuz outside the Iranian-approved route, and the retaliatory strikes by the US on Iranian military assets.”

According to Bellas, concerns over supply disruptions, tighter fuel inventories due to reduced vessel traffic through the Strait of Hormuz, and a US naval blockade of ships traveling to and from Iranian ports have also driven oil prices higher.

“Worries of supply disruption, tightening product balances as vessel traffic in the Strait of Hormuz declined sharply, and the US naval blockade of ships to and from Iranian ports have pushed prices higher,” he said.

Bellas added that diesel prices have risen sharply because of tightening supply fundamentals, seasonal demand, and renewed hostilities in the Middle East.

He also cited reduced diesel exports from Russia, saying these have been “significantly curtailed due to energy infrastructure damage caused by intensifying Ukrainian drone attacks.”

For gasoline, Bellas said the renewed US-Iran confrontation and tensions surrounding the Strait of Hormuz have been the main factors behind the expected increase.

“The escalation of tensions in the Middle East, which rose following renewed U.S.-Iran confrontation and threats around the Strait of Hormuz,” he said.

“Concerns over the availability of crude feedstocks and refined products during the peak demand season due to uncertainty surrounding vessel traffic through the Strait of Hormuz, and instability around the vital waterway, are further supporting gasoline prices,” he added.

Earlier this week, the Department of Energy said gasoline prices could either increase or decrease by as much as PHP1 per liter, while diesel prices were expected to rise by as much as PHP4.62 per liter and kerosene by up to PHP4.22 per liter.PNA