Motorists are bracing for a double-digit surge in fuel costs as escalating Middle East tensions disrupt global energy logistics and drive regional benchmarks to near-record levels.

Diesel prices are projected to rise by as much as ₱20 per liter, a 25 percent increase over early-week estimates based on the Mean of Platts Singapore (MOPS) trading. The anticipated hike would push pump prices in Metro Manila toward ₱80 per liter from the current range of ₱60.50 to ₱63.19.

Likewise, gasoline is expected to follow a similar trajectory, with industry projections suggesting a ₱10 per liter increase that would see prices reach roughly ₱62 to ₱66 per liter.

The price volatility stems from a deterioration in the terms of trade for energy-importing nations across Asia. Oxford Economics noted that the region is increasingly exposed to the conflict involving Iran, placing acute pressure on domestic fuel supplies.

As the Philippines relies heavily on MOPS as its primary pricing reference, any disruption in crude flows or refinery output in the region translates directly to higher costs for local consumers.

Supply concerns are being compounded by shifts in Chinese trade policy. Beijing has signaled intentions to restrict fuel exports to prioritize its domestic inventory amid the Middle Eastern rift. This move threatens to tighten the regional market, forcing the Philippines and other Southeast Asian neighbors to compete for more expensive replacement cargoes.

Leo Bellas, Jetti Petroleum president, said sentiment is being driven by growing anxiety over the duration of shipping blockades.

He noted that storage tanks across the Middle East are filling rapidly, which may force producers to slash output if exports through the Strait of Hormuz—the world’s most critical oil chokepoint—cannot resume.

Beyond transport, the energy crisis may also spill over into the power sector. Oxford Economics warned that the broader risk lies in liquefied natural gas (LNG) logistics.

If cargo flows from Qatar are disrupted, utilities may be forced to turn to the volatile spot market, driving up generation costs. This poses a specific threat to tech-led industrial production, which serves as a primary growth driver for the Philippine economy.

On Friday, March 6, the Energy Regulatory Commission (ERC) and the Independent Electricity Market Operator of the Philippines (IEMOP) began coordinating to mitigate the impact of price shocks on the Wholesale Electricity Spot Market (WESM).

IEMOP cautioned that higher global coal, oil, and LNG costs will likely translate into higher clearing prices as generators pass on fuel expenses.

ERC Chairperson Francis Saturnino Juan said the regulator is conducting stress tests to assess market risks and ensure consumer protection mechanisms are active.

“Higher fuel costs could lead to increased WESM clearing prices as generators reflect higher fuel costs in their market offers,” the ERC said in a statement. The agency warned that the situation could be exacerbated if large power plants experience outages, allowing more expensive units to set the market price.