Alaska doubles bulk fuel loan cap to $1.5 million for rural communities

Rural Alaska communities and fuel utilities can now borrow up to $1.5 million through the state's Bulk Fuel Revolving Loan Program, double the previous limit, after House Bill 388 took effect July 3, 2026.

The change matters most to the small municipalities, unincorporated villages, and private fuel retailers that depend on the program to buy heating oil and diesel in bulk before winter. Fuel arrives by barge once or twice a year in many communities, and the loan covers the purchase before customer payments come in. Sen. Lyman Hoffman told the Senate Finance Committee in June that rural residents in some areas could face heating fuel costs as high as $20 to $25 a gallon. "Many people in rural Alaska are spending 60% of their disposable income on utility costs," Hoffman said.

Who Can Apply

Eligible borrowers include organized municipalities and unincorporated villages with populations under 2,000, as well as private individuals or companies retailing fuel or electricity in those communities. Loans carry a base interest rate of 4 percent and must be repaid within one year using customer payments and Power Cost Equalization funds where available, typically in nine monthly installments. First-time bridge loan borrowers pay zero percent interest. Native village councils applying for loans must submit a resolution waiving sovereign immunity.

How to Apply

The Alaska Division of Community and Regional Affairs administers the program. Division Director Sandra Moller's office has posted an updated application packet on the division's website. The old application will be accepted through the end of 2026. Starting in 2027, only the new packet will be accepted.