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Lawmakers tackling the country’s ongoing energy concerns are looking at new ways to cushion consumers from sudden fuel price spikes, as discussions in Congress revealed how pricing mechanisms are driving immediate increases at the pump.

During the latest Legislative Energy Action and Development (LEAD) Joint Committee briefing on Monday, officials and industry players explained that fuel price hikes are implemented right away—even for older, cheaper stock—because of the replacement cost pricing system. This approach ensures companies can replenish supplies at current global prices, but it also means consumers feel the impact instantly.

Amid this, Murang Kuryente Party-list Rep. Arthur Yap floated a proposal aimed at easing the burden on the public without relying on government subsidies.

He suggested that state-run banks like the Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP) could offer long-term loans to oil companies, allowing them to spread fuel procurement costs over time instead of passing on price shocks immediately.

“Sa issue ng replacement cost for purchase of fuel supplies, hindi kaya pwedeng ang Landbank at ang DBP maghanda ng pondo para mapagamit sa mga oil companies in the concept of a long-term loan? Hindi naman kailangan na pondo lang nila—maaaring syndicated loan from the banking sector. Long-term loan po. Hilahin ng 10 years ang special loan para ma-absorb yung price shock at hindi na ipataw sa taong bayan. Commercial solution po ito. Hindi po ito subsidy or grant,” Yap said.

The idea comes as policymakers continue to weigh the limits of subsidies and other forms of financial aid, which some experts say may not be sustainable given the volatility of global fuel prices.

Yap stressed that his proposal is a market-based approach, not a subsidy, and would instead tap the banking sector to help stabilize prices while keeping government spending in check.

Similar concepts have also been raised by energy stakeholders, including analyst Guido Delgado, who pointed to the potential of a financing facility led by DBP and LandBank, possibly in partnership with private banks, to directly support fuel purchases.

Under this setup, fuel costs could be amortized over a longer period, potentially softening the immediate impact on electricity and fuel prices. Some estimates suggest that spreading costs over as long as 15 years could significantly reduce monthly increases, though these projections still need further review by regulators.

The LEAD Joint Committee is expected to continue studying both policy and financial solutions as it seeks to strike a balance between protecting consumers and maintaining fiscal sustainability.