Why are fuel prices going down for up to P16.80?
The Department of Energy has announced a major rollback in fuel prices for Nov. 10, with gasoline costs decreasing by P16.80 per liter.
Additionally, pump rates for diesel fell by P4.10 per liter and kerosene by P3.70 per liter.
The rollback is a slight relief for motorists, who have faced oil price hikes since March due to the conflict in the Middle East. But why are pump prices decreasing?
According to the DOE's Oil Industry Management Bureau, the price reductions are primarily driven by a "possible diplomatic resolution" to the US-Iran conflict.
US president Donald Trump told reporters on Nov. 9 that military action against Iran did not currently seem necessary.
"At this point ... taking the military action doesn't seem to be a very necessary thing. But we're locked and loaded, ready to go for any reason that changes," Trump said.
"I think it's going to be ending fairly soon," he added, referring to the conflict against Tehran.
The US president also said that he plans to keep a naval blockade in the Strait of Hormuz for now.
"The market continues to prioritize President Trump's more conciliatory tone toward Iran since the midterms," said Tim Waterer, chief market analyst at KCM Trade.
"While attacks on shipping around the Strait of Hormuz are still occurring, they have not escalated in a way that has forced a fresh risk premium into the market," he said.
The DOE has also attributed the price decrease to recent political developments in the US, as the Democrats took control of both chambers of Congress. Investors expect that the power shift could hasten the end of the Middle East conflict.
"These developments have lowered the geopolitical risk premium previously reflected in international oil prices, contributing to the sharp decline," the agency said in a statement.
It added that it will continue to monitor fuel price adjustments.
Furthermore, the DOE reported that the country's total petroleum supply as of Nov. 6 is 50.33 days. (with reports from REUTERS)