MANILA — Diesel and kerosene prices are geared for another rollback, while gasoline prices could go up in the third week of October, a Department of Energy (DOE) official said on Friday.

"Yung diesel at kerosene, good news tayo. Aabot yata ng P1 ang rollback, depende na lang [sa trading] ngayong araw," said Rino Abad, director of DOE's Oil Industry Management bureau.

"Mukhang magkakaroon po ng increase sa gasoline… less than 50 centavos po ang increase," he told TeleRadyo Serbisyo.

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HAMAS-ISRAEL CONFLICT

Fears of oil supply disruptions due to the conflict between Israel and Hamas are largely "speculative", Abad said.

"Hindi naman engaged sa malaking supply ang Israel… Halos hindi siya nasa radar ng mga oil supplier na bansa," he said. "Wala ho tayong ini-import na kahit anong petroleum product galing Israel."

"Admittedly, yung kaniyang neighboring countries…ay malalaking bansang nagsu-supply ng oil. Napakababa ho ang possibility na magkaroon po ng supply disruption. Hindi naman sila directly engaged in a military conflict with Israel," he added.

A weekend attack by Hamas on Israel, and Israeli's military retaliation, have left thousands dead and rattled oil markets, amid fears that other nations might intervene and possibly disrupt shipments in the Middle East.

The region accounts for more than one-third of the world's seaborne oil shipments.

"While the prospect that oil supply flows will be impacted currently remains limited, the deadly strikes prompted traders to price in a higher geopolitical risk premium," the International Energy Agency said in its regular monthly report.

"There has been no direct impact on physical supply," it added.

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But with supply and demand on the oil market currently tightly balanced, the IEA said it "stands ready to act if necessary to ensure markets remain adequately supplied".

The Paris-based agency, in addition to its analysis and advisory roles, coordinates the release of emergency stocks held by its 31 mostly advanced-economy member nations.

POWER ISSUES

Meanwhile, the Energy Regulatory Commission has asked Meralco to implement the most optimal energy mix to prevent a repeat of the considerable increase in power rates this month.

Meralco had announced an overall rate hike of P0.42/kwh due to higher generation charge brought about by depleting natural gas reserves from the Malampaya facility.

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In the absence of natural gas, 2 major plants used the more expensive liquid condensates, which cost double the price of natural gas for the electricity it produces.

But Meralco said this was already the optimal energy mix.

Meralco head for utility economics Larry Fernandez said if the 2 Lopez-owned plants were not allowed to produce power using liquid condensates, there could have been a deficiency in power supply for Luzon that would push up prices at the spot market.

The Lopez-owned plants produce about 1,900 megawatts of power for Meralco.

The creation of a regasification facility for imported liquified natural gas should have replaced some indigenous natural gas from Malampaya.

But the construction of the facility has been delayed, making them unable to fully process imported liquefied natural gas.

As a result, power plants need to use more expensive liquid condensates to produce electricity.

— With a report from Agence France-Presse and Alvin Elchico, ABS-CBN News