A big fuel hike of not less than three pesos for diesel and gasoline is expected next week, following the ongoing Israel-Iran conflict on oil supply.

In a radio interview Friday, Oil Industry Management Bureau Assistant Director Rodela Romero said that fuel price hikes of P4.30 to P4.80 for diesel, P2.50 to P3 for gasoline, and P4.25 to P4.40 for kerosene can be expected next week based on the four-day trading in Mean of Platts Singapore (MOPS).

This is considered as the biggest increase in fuel prices this year.

"There isn't actual supply disruption, but there's a fear looming around the speculated closing of critical global shipping passages due to the Israel-Iran conflict," said Romero, whose bureau is under the Department of Energy.

Due to the ongoing conflict between Iran and Israel, concerns have emerged over a potential slowdown in the flow of shipping and crude oil through the Strait of Hormuz, which could drive oil prices upward and impact the global economy.

The Strait of Hormuz is a critical passageway for the global energy market, serving as a conduit for nearly one-third of the world’s seaborne oil and about one-fifth of global liquefied natural gas (LNG) shipments.

Earlier in the week, President Ferdinand Marcos Jr. said that fuel subsidies will be provided amid the expected large-scale oil price hikes.

"We are starting already with the assumption that the oil prices will in fact go up and I cannot see how it will not. Because the Strait of Hormuz will then be blocked if it escalates. The oil cannot come out of its sources. So the prices will certainly be affected. We'll be giving subsidies like we did during the pandemic,'' Marcos said.

Israel and Iran are on their eighth day of conflict, following Israel's June 13 attack of key military and nuclear sites in Iran, and the subsequent missile retaliations of Iran to residential areas in Israel. Velle White/DMS