(UPDATE) LOCAL oil industry sources said on Friday that fuel prices are projected to go down next week, mostly due to the effects of the recent developments of the US imposing reciprocal tariffs on several countries.

They expect that gasoline prices will go down between P3.30 to P3.75 per liter, and diesel prices will slip by as much as P2.90 to P3.40 per liter.

Kerosene prices are expected to follow suit with price cuts by P3.40 up to P3.50 per liter.

These estimates are based on the 4-day trading of Mean of Platts, Singapore, (MOPS) the pricing basis of refined goods in Southeast Asia.

Sources said the reasons for the estimated drop in fuel prices next week are mostly due to the trade actions of US and China against each other, as the market expects oil demand to go down as a result of this.

"Based on the 4-day trading in MOPS, we will be expecting another round of rollbacks for fuel pump prices. The reasons for this are namely due to the escalating trade tensions between US and China resulting to a fear of recession and reducing demand for crude oil; Saudi Arabia expecting to cut by May its Official Selling Price for Asia-bound crude; and the OPEC planning to accelerate production by May from the initial commitment of 135,000 barrels per day to 441,000 barrels per day," DOE-Oil Industry Management Bureau director Rodela Romero said.

"Based on this week's 4-day trading of MOPS and foreign exchange average, prices are expected to go down next week as the deepening trade war between the US and China has significantly increased the fear and uncertainty over oil demand. Also in the short term, the growing risk of weakening demand and rising production from OPEC+ could possibly hinder the pace of increases in oil prices," Jetti Petroleum president Leo Bellas said.

This week, local oil companies implemented mixed price adjustments for all fuels, as gasoline prices decreased by P0.10 per liter, diesel prices stayed, while kerosene prices went down by P0.50 per liter.

April power rates

Amid the prospects of big-time fuel price cuts, the Manila Electric Co. (Meralco) said there will be an increase of P0.7226 per kilowatt-hour (kWh) in the April electricity rate, bringing the overall rate for a typical household to P13.0127 per kWh this month from P12.2901 per kWh in March.

It added that for residential customers consuming 200 kWh, the adjustment is equivalent to an increase of around P145.00 in their total electricity bill.

According to the distribution utility, the main reason for the upward adjustment in the rates for residential consumers this month is the increases in the generation and transmission charges.

Firstly, Meralco said that the generation charge increased by P0.7278 per kWh during the period, mainly because of higher costs from the Wholesale Electricity Spot Market (WESM).

WESM charges went up by P3.4205 per kWh for the period, as a result of the tighter supply conditions in the Luzon Grid during the March supply month.

Last March, Meralco said, the average and peak demand increased by 816 MW and 1,123 MW, respectively, while average capacity on outage was also higher by 979 MW during the period.

Meralco added that the Luzon grid was placed on Yellow Alert on March 5 and the secondary price cap was triggered 6.39 percent of the time during March, indicating persistently high spot market prices during the period.

Also, charges from Power Supply Agreements (PSAs) increased by P0.2811 per kWh, following the expiration of the 400 MW PSA with Limay Power Inc. on Feb. 25.

Furthermore, increases in WESM and PSA charges were partly tempered by lower charges from independent power producers (IPPs), which went down by P0.4738 per kWh due to the appreciation of the peso against the US dollar. Around 97 percent of IPP costs were dollar-denominated.

WESM, PSAs, and IPPs accounted for 23 percent, 44 percent, and 33 percent, respectively, of Meralco's total energy requirement for the period.

Moreover, Meralco said that also contributing to the upward adjustment of electricity rates in April was the P0.0809 per kWh increase in the transmission charge for residential customers.

This increase was mostly because of higher ancillary service charges from the reserve market incurred by the National Grid Corp. of the Philippines (NGCP).

Meralco also mentioned that this month's transmission charge also includes the last of three installments of February and March 2024 reserve market transactions for Luzon that the Energy Regulatory Commission (ERC) directed NGCP to collect.

Other charges, including taxes, also registered a net increase of P0.1163 per kWh for the period.

Meralco also said that the factor helping mitigate the overall increase was the implementation of the distribution rate true-up adjustment, or refund, of P0.2024 per kWh for residential customers, which began during the April billing period.

The distribution utility noted that the said adjustment is pursuant to the order of the ERC dated March 5, 2025, provisionally approving the refund amount of P19.90 billion, and covers the difference between Meralco's Actual Weighted Average Tariff (AWAT) and the latest approved distribution rate for the period July 2022 to December.

Meralco noted that the refund shall be for 36 months or until such time that the amount is fully refunded.

Meanwhile, the distribution utility reported that pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively; while taxes, universal charges, and Feed-in Tariff Allowance are all remitted to the government.

Lastly Meralco said that its distribution charge has not moved since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022.