Why pump prices change every Tuesday: how gasoline and diesel are priced in the Philippines

Every Monday, drivers across the country check the news for one number: how much gasoline and diesel will move the next morning. Oil companies adjust their prices every week to reflect the world oil market, announcing on Monday and applying the change on Tuesday, BusinessMirror reported. For the week of October 6, 2026, gasoline could rise by at most ₱1.93 a liter and kerosene by ₱3.30, while diesel had to fall by at least ₱1.30. This explainer looks at where those numbers come from.

Who sets the price

Since the Oil Deregulation Law of 1998 (Republic Act 8479), anyone may import crude oil and fuel, and companies set their own prices. The law gives the Department of Energy a monitoring role: it must publish daily international crude prices, follow domestic prices and collect monthly reports on imports and inventories.

The same law has an emergency clause. In a national emergency, the DOE may temporarily take over or direct the operations of oil firms. That clause is now in use. Under Executive Order 110, which declared a national energy emergency in March 2026, the DOE announces the weekly adjustment itself, as a maximum increase or a minimum rollback, Philstar reported. Energy Secretary Sharon Garin told GMA News that the DOE caps the weekly adjustment, not the price itself.

Where the weekly number comes from

The DOE bases each week's figure on a five-day average of Mean of Platts Singapore (MOPS), the benchmark trading prices for fuel in Asia, together with product costs, freight and currency movements, according to Philstar. Because most fuel is bought on these regional markets, world crude moves do not reach the pump at once: changes can take several weeks to two months to pass through, Philstar said, citing an earlier study.

The Philippines is a price taker, not a price setter. It imports about 98 percent of its crude oil from the Middle East and has one refinery, Petron's in Bataan; most refined fuel comes from Asian refineries that run on Gulf crude, Philstar reported. Much of what the country uses arrives as finished products, Rappler noted.

The parts of the price

Three layers sit on top of the cost of the fuel itself.

Excise tax. Since 2020 the TRAIN law (RA 10963) has set a fixed excise of ₱10 per liter of gasoline, ₱6 per liter of diesel and ₱5 per liter of kerosene. Because it is fixed per liter, it does not rise when oil prices do.

VAT. Value-added tax is 12 percent on a tax-inclusive base: it is charged on import costs, excise, freight, insurance and margins together, so it grows with the pump price. BusinessMirror's illustration: if diesel rose from ₱50 to ₱140 a liter, the VAT on it would rise from ₱6 to ₱16.80.

The peso. Fuel is bought in dollars. The Bangko Sentral's own primer shows the effect: a stronger peso lowers the peso price of imported fuel, and a weaker one raises it. In early September 2026 the DOE said the peso's slide of about 68 centavos against the dollar, on top of the Iran war, produced that week's increases of ₱4.69 for gasoline, ₱5.18 for diesel and ₱5.58 for kerosene per liter, BusinessWorld reported.

How world events reach your tank

Before the US-Israel war against Iran began on February 28, 2026, diesel and gasoline cost about ₱50 to ₱60 a liter, Rappler reported. Even after a deal on the Strait of Hormuz, traders kept pricing in the risk, Philstar said. The DOE's reasons for the October 6 adjustment were regional: supply constraints, refinery operating conditions and demand in big consuming countries for gasoline, and changing supply and shipping conditions for diesel.

What the government can do

Republic Act 12316, signed on March 25, 2026, lets the President suspend or reduce fuel excise when Dubai crude averages $80 a barrel or more for a month. Each order lasts up to three months, and the power expires at the end of 2028. So far it has been used for LPG and kerosene, not gasoline or diesel: the latest suspension, ordered on September 25, again excluded pump fuels, Rappler reported.

For public transport, the LTFRB gives jeepneys and other public utility vehicles a ₱12 per liter fuel discount and has proposed raising it to ₱20, which needs approval from the Department of Transportation and Malacañang, the Daily Tribune reported.

Track the week's numbers on our Economy today page, which shows world crude prices and the peso every day.