Philippines diesel price increase outpaces gasoline and kerosene

The Philippines diesel price increase led another round of higher pump prices beginning August 25, with diesel rising P2.31 per litre, compared with increases of P1.08 for gasoline and P0.95 for kerosene. The adjustments, reported by Rappler from a Philippine Department of Energy press conference, cover the August 25 to 31 week and mark a second consecutive weekly increase.

Diesel recorded the largest move among the three products. Its increase was P1.23 per litre greater than the gasoline rise and P1.36 higher than the kerosene adjustment. The divergence reflects reported gains in international refined-product prices, with diesel rising more than gasoline over the relevant trading period.

Why did diesel prices rise more than gasoline and kerosene?

According to Rappler's account of the DOE's oil monitor, Dubai crude rose by about $8.90 a barrel during August 10 to 14. International gasoline prices increased by about $6.50 a barrel, while kerosene and diesel prices rose by about $11.50 and $11.40, respectively.

The report said the DOE linked the market pressure to heightened tensions in the Middle East and reduced tanker movements through the Strait of Hormuz. The department recorded 16 vessels passing through the waterway on August 11, down from 17 a day earlier. The Strait of Hormuz, between Iran and Oman, is a major route for oil shipments, so disruptions or perceived risks to traffic can affect crude and refined-fuel pricing.

Asian diesel prices were also supported by regional supply conditions, Rappler reported, including Russia's extended ban on diesel exports. The reported factors describe market conditions behind the adjustment; they do not establish how long the higher retail prices will persist.

How does the latest adjustment compare with the previous week?

The August 25 increase followed larger reported rises a week earlier: P2.49 per litre for gasoline, P3.84 for diesel and P5.01 for kerosene. Those August 18 adjustments had reversed reductions in the preceding week, when companies cut gasoline prices by P4.70 per litre, diesel by P4.30 and kerosene by P4.88, according to Rappler.

The Philippines is a net importer of petroleum products, making domestic pump prices sensitive to changes in global crude and refined-product benchmarks, currency movements and shipping conditions. Retail adjustments can therefore differ by product as their international market prices diverge.

What were Philippine fuel inventories before the increase?

As of August 21, the DOE reported average fuel inventories equivalent to 47.22 days of supply, Rappler said. Diesel stocks stood at 47.66 days, gasoline at 44.39 days and kerosene at 121.85 days. Those inventory figures provide a snapshot of available supply before the latest pump-price adjustment, rather than a forecast of future prices.

This story draws on original reporting from Econbrowser.