LTFRB set to OK P1 jeep fare hike, provincial buses to follow

The government is preparing to roll out fuel subsidies amid the rise in global oil as Iran and Israel exchanged missile strikes for a sixth day, President Ferdinand Marcos Jr. said, with the Land Transportation Regulatory and Franchising Board (LTFRB) poised to grant petitions from public utility jeepneys for a P1 hike in minimum fare by next week.

While global oil prices eased Wednesday following Tuesday’s surge, investors remained on edge fearing a US intervention in the Israel-Iran conflict after President Donald Trump called for Tehran’s “unconditional surrender.”

Local oil companies estimated that next week’s pump price increases could range from P3.40 to P3.60 per liter for diesel and P2.30 to P2.50 per liter for gasoline, based on the average of June 16-17 Mean of Platts Singapore trading.

“Growing uncertainty around the Iran-Israel hostilities and concerns the conflict may intensify and disrupt supply, particularly in the Strait of Hormuz, have further pushed up the prices of crude oil and refined fuel products,” said Jetti Petroleum president Leo Bellas.

Rino Abad, director IV of the Department of Energy’s Oil Industry Management Bureau, said the high oil prices are driven by speculation that the Iran-Israel conflict could impact global oil supply.

However, Abad said what has been consistent in the analysis is that “there is no actual supply disruption in the Middle East,” in particular, Iran’s exports of 1.5 million to 1.6 million barrels of oil per day.

Abad explained that even if a supply disruption were to occur, it would amount to only 1.5 percent to 1.6 percent of global oil supply.

The President said the government will aid those most affected, much like it did during the COVID-19 pandemic, as he acknowledged that higher oil prices would impact many sectors, especially public transportation.

“We are starting already with the assumption that the oil prices will in fact go up,” President Marcos said, pointing to the possibility of the Strait of Hormuz being blocked if regional conflict escalates.

“The oil cannot come out of its sources. So, the prices will certainly be affected,” he added.

Should crude prices exceed $80 per barrel, government fuel aid for public transport drivers and fisherfolk will be automatically triggered. As of June 16, the price of Dubai crude was at US$73 per barrel.

LTFRB chairman Teofilo Guadiz III said the agency will issue a resolution on the P1 fare hike petition next week.

“One peso across the board, but that’s all – there will be no per kilometer increase yet. It will be flat rate first because it will be too burdensome for consumers if we adjust the flat rate and have the per kilometer increase,” LTFRB chairman Teofilo Guadiz III said in an interview with dzBB.

“We may have a provisional increase, but subject to certain conditions, such as if gasoline prices reach $80 per barrel for the Dubai oil,” he added.

The LTFRB could also grant the fare hike petition for provincial buses but “on a graduated rate for the first 10 kilometers then subsequently, we will have a price for every subsequent kilometer,” he said.

The Department of Energy has urged gasoline station owners and operators to provide discounts for PUVs affected by the anticipated jeepney fare hike.

“Specifically, we are asking gas stations to offer discounts or promotions to help relieve the burden on our public utility vehicles,” said DOE officer-in-charge Sharon Garin.

Abad said gasoline is now around P51 per liter and diesel at around P60 per liter, compared to January pump prices at P70 per liter for gasoline and P60 per liter for diesel.

“Our worst case scenario, it (oil price hike) might reach 7 to 8 (pesos per liter),” Abad said. “What we can do is to compare it to the historical situation. It’s hard to forecast.”

Even if the projected P7 to P8 per liter increase occurs, Abad said gasoline prices would be around P62 pesos per liter, which is lower than or similar to January 2025 prices. With AFP

Editor’s Note: This is an updated article. Originally posted with the headline “Marcos: Gov’t preparing fuel subsidies as oil prices seen to rise.”