Manila: Prices of gasoline may likely be slashed next week, but diesel prices are seen to rise further, according to an oil company official.

According to Philippines News Agency, Jetti Petroleum President Leo Bellas stated that gasoline prices may be reduced by PHP0.50 to PHP0.70 per liter next week. In contrast, diesel prices are expected to increase between PHP0.30 and PHP0.50 per liter.

Bellas explained that the easing gasoline price reflects the ample supply situation in Asia. This is attributed to supply likely outpacing demand following the release of China's third batch of clean export quota volumes. Rising stockpile inventories of gasoline in the region have also pressured prices as exports are expected to be capped as the summer driving season draws to a close.

The weakening of the Philippine peso against the US dollar this week, with the local currency closing on Thursday at the 58-level, has resulted in a larger potential price increase on diesel and reduced rollback on gasoline, according to Bellas.

He further traced the forecast for sustained rise in diesel prices to a significant rebound of the benchmark price in the past two days. This is due to worries of a tightening market, compounded by concerns over Ukraine's intensified drone attacks on Russian energy infrastructure and renewed Western efforts to curb Russian oil and gas flows, which could disrupt supplies.

Bellas also noted that Russia's recent announcement of a partial ban on diesel exports and extension of an existing ban on gasoline exports are additional factors on the expectations for sustained diesel price hikes. Diesel is further supported by stabilizing industrial activity in Europe and increased demand for harvest season in the US. Worries that the ongoing supply risks could disrupt product flows and affect supply in Asia have also lent support to diesel price.