MANILA, Philippines — In a major reversal of long-standing fuel market trends, diesel has officially overtaken gasoline as the more expensive fuel in the Philippines. As of late March 2026, the price of diesel at the pump has surged to as high as ₱115 per liter, compared to gasoline prices which remain just above ₱90 per liter.
Industry experts and energy officials cite a “perfect storm” of geopolitical conflict and unique demand profiles as the primary drivers of this historic shift.
1. The Impact of the Middle East Conflict
The primary catalyst was the outbreak of war in the Middle East on February 28, 2026, involving military actions between the U.S., Israel, and Iran.
- The Strait of Hormuz Bottleneck: Over 1,000 cargo ships have been reported blocked at the Strait of Hormuz—a vital waterway where 20% of the world’s oil passes.
- Supply Disruption: The closure of this route has severely cut the export of “distillate-rich” Middle East crude, which is the primary feedstock for diesel. This has caused diesel prices to rise much faster than gasoline.
2. Global Demand vs. Local Supply
While gasoline is primarily used for private cars and light vehicles, diesel is the lifeblood of the global economy.
- Heavy Industry Reliance: Logistics, shipping, buses, and heavy machinery all run on diesel. As global economic activity remains robust despite the conflict, the demand for freight movement keeps diesel prices elevated.
- Refinery Dynamics: 97% of Philippine liquid petroleum imports come from Asian refineries, but those refineries rely on crude oil from the Middle East. Damage to oil infrastructure caused by recent bombardments has further tightened the availability of refined products.
3. The “Legacy” Effect of Russian Sanctions
Jetti Petroleum President Leo Bellas noted that the market was already fragile before the Middle East conflict began. Western sanctions on Russia following the 2022 invasion of Ukraine had already “disrupted flows and tightened supply availability,” as Russia was a major global supplier of refined diesel.
4. Price Comparison: January vs. March 2026
The leap in prices over just three months illustrates the volatility of the current market:
- Diesel: Rose from a range of ₱47.77–₱71.90 in early January to ₱94–₱115 in March—a staggering 60% increase.
- Gasoline: Rose from ₱50–₱74.02 in January to above ₱90—a 23% increase.
Government Response
To mitigate the impact on the transport and agriculture sectors, the Philippine government has:
- Suspended Fare Hikes: Planned provisional fare increases for jeepneys and buses were halted to protect commuters.
- Fuel Subsidies: Distributed financial aid to public utility vehicle (PUV) drivers, farmers, and fishers.
- Tax Discussions: There are ongoing calls to suspend excise taxes on petroleum products, which would slash diesel by ₱6 and gasoline by ₱10 per liter, respectively.