Manila: Fuel prices are expected to increase anew next week, by as much as PHP0.60 per liter, on supply risk due to geopolitical issues between the U.S. and Iran, among others.

According to Philippines News Agency, Jetti Petroleum president Leo Bellas, in a report Friday, cited price developments based on the Asian benchmark and the movement of foreign exchange as of Thursday. Bellas indicated that diesel prices may increase between PHP0.40 to PHP0.60 per liter and gasoline, up to PHP0.10 per liter.

"This week's oil price movement is primarily due to the market's reaction to developments between the US and Iran by pricing in the additional risk of supply disruption in the event of conflict," Bellas explained.

Bellas further detailed that the Mean of Platts Singapore (MOPS) prices have jumped by over 5 percent from the Feb. 16 settlement. This increase is attributed to "concerns over military activities in the region," which have heightened the likelihood of U.S. strikes on Iran and reduced the chances of resolving the conflict through diplomatic means.

While gasoline MOPS prices have actually softened due to healthy regional inventories and supply, rising freight and premium due to geopolitical risks have offset the prospect of a potential price rollback, Bellas noted.

He also mentioned that the strengthening of the Philippine peso against the U.S. dollar is helping to temper the potential increase in domestic prices this week. The local currency has strengthened to as much as the 57-level against the U.S. dollar.

Oil prices have been on the rise across-the-board for six weeks, with the jump this week at PHP1.20 per liter for gasoline, and PHP0.60 per liter for diesel and kerosene.