Manila: Domestic fuel prices are projected to be slashed by as much as PHP9.50 per liter next week as international oil prices continue to decline amid expectations of the full reopening of the Strait of Hormuz. Passage through the Strait of Hormuz was disrupted amid the Middle East crisis that began in late February, causing oil prices to surge to record-high levels.

According to Philippines News Agency, with the full reopening of the strait expected following the U.S.-Iran interim peace pact, which has been electronically signed by the leaders of both countries, diesel prices are projected to decrease by PHP7.50 to PHP9.50 per liter, while gasoline prices may go down by PHP3 to PHP5 per liter next week.

Jetti Petroleum President Leo Bellas, in a message to journalists, noted that "world oil prices declined this week as the market is already pricing in the potential reopening of the Strait of Hormuz and the immediate return of Middle Eastern crude to the market, after the U.S. and Iran reached an interim agreement." He said the signed peace deal gives the U.S. and Iranian negotiators 60 days to work on the final agreement.

Bellas stated that the easing of diesel and middle distillate prices is supported by the availability of replacement flows that helped reduce immediate market tightness. Asian refiners managed to secure alternative crude feedstock, allowing them to support higher refined product output despite ongoing disruptions linked to the loss of Middle Eastern supply.

He added that the restart of refineries following planned maintenance and the availability of alternative crude supplies for Asian refiners helped ease gasoline supply constraints and lower prices, even as demand remained robust and inventories stayed low. Bellas also mentioned that the peso's appreciation against the U.S. dollar contributed to lower domestic fuel prices this week.