(SPOT.ph) If you’re like us, you’re probably waiting for the staggering gas prices to “go back to normal.” Brace yourself, though: Analysts say that we’re in for a longer-than-expected wait. A report from First Metro Securities Brokerage Corporation shared via DBS Bank suggests that we’ve entered a new equilibrium, where even a ceasefire won’t bring back the cheap(er) fuel of 2025.
According to the report, damage to critical energy infrastructure in the Middle East has stifled oil production. Department of Energy (DOE) Secretary Sharon Garin had explained that the infrastructure damage in the Middle East could take months to repair and recover.
“Kung two weeks lang ‘yung giyera, siguro babalik siya kaagad. But now, structural damage has already been done. It will take a long time to fix [the facilities]. Bababa man, hindi ganun kabilis ‘yung pag-akyat,” Garin said in an interview with Super Radyo dzBB. “Baka hindi na tayo aabot ng tulad ng dati na P60 pesos per liter ‘yung diesel dito.”
This, combined with the continued closure of the Strait of Hormuz, is keeping prices elevated. When the year started, the world had a surplus of oil; now, we are in a shortage. With the market as tight as it is, prices are naturally staying high.
Also Read: How Close Are We to Running Out of Fuel in the Philippines?
Not just the Philippines
Before the conflict erupted in late February, diesel was averaging around P55 per liter. At the height of the crisis in early April, prices skyrocketed to as high as P160 per liter in some parts of Metro Manila. Even with the fuel price rollback of up to P23 per liter this week (and possibly another one next week), we’re still far from the “regular” prices at the start of the year.
It's a reality that the Palace is bracing for. On March 24, President Ferdinand "Bongbong" Marcos Jr. declared a State of National Energy Emergency via Executive Order 110. The year-long order is a “whole-of-government” response to the crisis. As a net importer of petroleum, the Philippines remains heavily dependent on external sources, making our local economy and transport sectors incredibly vulnerable to global production shocks.
But the problem is not unique to the Philippines. Even on the global market, prices have yet to return to where they were before the conflict. Brent crude—the global benchmark used to set prices at the pump—was averaging $72 per barrel. Now, experts have officially raised their average forecast to $77–$82 per barrel.
So while local rollbacks may offer some relief, global oil prices will take some time to return to pre-war normalcy.
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Celia Nachura writes to pay for plane tickets, tennis classes, and a pile of books she’ll never have the time to read. She is also the emotional support human to two dogs, Daisy and Nacho.