Up to P9/liter cut in diesel prices likely

MANILA, Philippines — Upon the signing of a breakthrough deal to end the Middle East war, markets continue to respond positively, raising expectations of larger fuel price rollbacks next week.

After the first three trading days on the Mean of Platts Singapore, an industry source told The STAR that diesel prices could see a rollback of P7 to P9 per liter next week.

Gasoline prices, meanwhile, are projected to decline by P3 to P5 per liter.

These estimates are still subject to change, as next week’s price adjustments will depend on the outcome of the remaining two trading days.

Global markets are now turning their attention to Switzerland, where the United States and Iran are expected to formally seal a peace framework today that could bring an end to nearly four months of conflict. The peace deal has however been signed electronically by the respective heads of state, reports said, and that an in-person ceremony may no longer be necessary.

The landmark deal, which followed months of negotiations, is set to reopen the vital Strait of Hormuz, which once carried around 20 percent of global oil and gas supplies but is now under restricted maritime traffic.

While details of the agreement have yet to be clarified, the International Energy Agency (IEA) described the development as “an encouraging step forward.”

“Prices had already retreated from recent highs as market tensions eased on a surge in Gulf exports at the start of June,” it added.

Global benchmark Brent crude extended its decline yesterday, slipping to around $78 per barrel and edging closer to its lowest level since late February.

“If the deal holds, exports and production from the Gulf should see a gradual recovery – not least because Iranian oil exports can fully resume once the US blockade is lifted,” the IEA said.

Meanwhile, economist Emmanuel Leyco yesterday said that the drop in the prices of petroleum products should be felt immediately amid the peace agreement between the US and Iran. – Bella Cariaso