Gas Trends in 2025
- January 20, 2025
The year 2025 opened with a surge in petroleum prices, with the first increase taking effect on January 7. Gasoline and kerosene prices rose by ₱0.90 to ₱1.10 per liter, while diesel saw a larger hike of ₱1.30 to ₱1.50 per liter.
Just a week later, motorists faced another fuel price adjustment. On January 13, oil companies announced fuel price hikes, effective the next day, which exceeded government estimates. Diesel prices rose by ₱0.90 per liter, while gasoline increased by ₱0.80. Kerosene prices, adjusted by Seaoil and Shell Pilipinas, also saw a ₱0.80 hike. These figures surpassed the Department of Energy’s forecasted increases of ₱0.40 to ₱0.70 for gasoline, ₱0.45 to ₱0.75 for diesel, and ₱0.65 to ₱0.75 for kerosene.
Reasons for the price hike
The Department of Energy (DOE) linked the recent rise in global oil prices to several key factors affecting supply and demand in early 2025.
After a small drop on December 31, prices rose sharply due to increased heating fuel demand caused by harsh winter conditions in the U.S. and Europe. Ongoing production cuts by the Organization of Petroleum-Exporting Countries (OPEC), until the end of the first quarter in 2025, along with geopolitical tensions, have also added to price volatility.
As of January 7, 2024, Dubai crude prices rose by $1.80 per barrel in a week. Global gasoline prices also rose by $1.90 per barrel, diesel by $2.80, and kerosene by $2.50. Lower U.S. crude inventories, down by 1.18 million barrels, combined with peak winter heating demand, have tightened supplies further.
In Asia, gasoline demand remains strong, driven by Indonesia’s significant imports and a $27.35-billion stimulus package to support low-income families. The diesel and ultra-low sulfur gasoil markets in Asia also strengthened, fueled by high heating needs in the U.S. and consistent consumption across the region.
Global oil trends
Global oil demand is expected to continue its steady growth at 104 million barrels per day (mb/d), driven largely by emerging economies. The International Energy Agency (IEA) predicts that oil production will grow to 1.05 mb/d in 2025 from 940,000 barrels per day (kb/d) in 2024, reflecting an increase of 11.7%.
Goldman Sachs forecasts that Brent crude oil prices—a key global benchmark for crude oil pricing—will range from $70 to $85 per barrel, with an average of around $76 for 2025. The global investment bank forecasts a modest rise in oil prices in the short term, followed by a dip as production capacity slows further growth. However, unpredictable geopolitical events could push prices beyond this range.
The World Bank also forecasts a decline in global commodity prices, including oil, to a five-year low in 2025 due to an anticipated oversupply, which may limit significant price increases.
However, the Goldman Sachs report notes that oil demand is expected to grow for the next decade. “Emerging market demand for energy will rise as those economies expand,” said Daan Struyven, co-head of the bank’s Global Commodities Research. Struyven also highlighted challenges in decarbonizing air travel and petrochemical products, which could continue to drive demand.
Sources:
https://www.abs-cbn.com/news/business/2025/1/4/first-oil-price-hike-in-2025-expected-next-week-1157
https://www.philstar.com/business/2025/01/13/2413883/fuel-prices-nearly-p1-liter-2nd-straight-week
https://www.iea.org/reports/oil-market-report-january-2025
https://www.facebook.com/photo/?fbid=1139986427917938&set=a.348913040358618
