Manila: Senate President Sherwin Gatchalian on Tuesday renewed his call to the Energy Regulatory Commission (ERC) to conduct a thorough audit of fuel pass-through costs following the latest round of pump price increases this week.

According to Philippines News Agency, Gatchalian emphasized the necessity of the audit to ensure that any resulting increase in electricity rates remains justified, reasonable, and transparent for consumers. With domestic fuel prices breaching the PHP100-per-liter mark, the Senate leader warned that Filipino households could soon face another wave of higher electricity bills if generation costs are left unchecked.

Gatchalian previously filed Senate Resolution 581 seeking a legislative inquiry into the ERC's lack of regular audits on fuel cost pass-through mechanisms. As of June, the Philippines recorded the highest average residential electricity rate in Southeast Asia at PHP12.43 per kilowatt-hour (kWh), slightly surpassing Singapore's PHP12.34 per kWh.

Gatchalian stressed that high generation charges coupled with inadequate oversight highlight the urgent need for strict accountability, ensuring that distribution utilities deliver power to end-users at the least possible cost. He cited Manila Electric Co. (Meralco) as an example, noting that the utility's generation charges are heavily tied to contracted supplies of liquefied natural gas (LNG) and coal. In July, fuel costs accounted for 86.16 percent of Meralco's overall generation charge.

Under the Electric Power Industry Reform Act (EPIRA) of 2001, distribution utilities are permitted to pass on fluctuations in fuel and generation costs directly to consumers through generation rates. The ERC is mandated to regularly review and verify these pass-through charges to prevent over-recovery and ensure utilities comply with least-cost power supply requirements.

In recent years, consumer advocacy groups and lawmakers have repeatedly pointed out delays in the ERC's post-audit processes. The backlog in administrative checks has raised concerns that utility companies may be passing unverified cost adjustments onto consumers without immediate regulatory validation.