Manila: After a two-week decline, fuel prices are projected to rise by more than PHP4 per liter next week due to price hikes in the international market caused by fading hopes for a peace pact between the United States and Iran. According to Philippines News Agency, citing price movements as of Thursday, Jetti Energy, in a report sent to journalists Friday, said diesel prices are projected to rise between PHP3.75 and PHP4.25 per liter.

Gasoline prices are, in turn, seen to rise from PHP2.50 to PHP3 per liter. The report noted that oil prices in the international market increased this week 'as optimism for a peace deal and near-term reopening of the Strait of Hormuz traffic faded, with markets becoming more skeptical as negotiations are now further complicated by competing demands for compensation over the five-month conflict.'

The report explained that diesel and gasoline prices surged as 'diplomatic efforts to reopen and normalize transit through the Strait of Hormuz have stalled, and the continued decline of global product inventories due to refinery output disruptions is keeping markets tighter than crude.' It also noted that the price of gasoline 'is supported on positive regional demand signals while uncertainty over Chinese export volumes persists.'

'Middle East supply risks and constrained Russian exports continue to provide underlying support to diesel,' it said, adding that 'recent signs of weaker global demand and build in US crude inventories have weighed on prices and may temper further gains.'