The government of President Gustavo Petro announces a gradual increase in fuel prices starting in October to reduce the deficit of the Price Stabilization Fund. (FEPC) is the hair of transporters, merchants, businessmen and, in general, all Colombians.
According to official accounts, if fuel price adjustments continue to be deferred, the fund’s deficit will reach 34 billion pesos at the end of this year, which is 2.7 percent of GDP. Thus, the price for a gallon of regular gasoline for December would be between 9,700 and 9,900 pesos.
In Bogota, the price of a gallon of gasoline was below 9,300 pesos since March 2020. There have been light ups and downs since those days; As of November 2021, the price of the gallon was 8,991 pesos and rose to 9,372 pesos in January this year, a price that remained until the rise of 150 pesos that was created a few days before the end of the Duke government. With this increase, according to the Colombian Petroleum Association, the price of a gallon of gasoline in Bogota was 9,522 pesos per gallon, a rate not seen since late 2018.
In the words of President Gustavo Petro, the fund’s deficit was due to “non-payment by the previous government” (10 billion pesos per quarter), while he questioned the continuation of fuel subsidies, which, in his opinion, are “equivalent to the national Almost half of the budget deficit.”
The truth is that there is an imbalance in the state finances due to subsidies. Experts and union spokespersons confirm that the situation is volatile. FendiPetroleo President Juan Carlos Velez says Colombia has the cheapest fuel in Latin America and confirms that if it is not resolved soon, the deficit will be greater.
Is gasoline as cheap as they say? If we stick to data from Global Petrol Prices (GPP), an internet platform that tracks fuel and energy costs, our country has lower prices than other countries in Latin America.
Venezuela has the cheapest gallon of gasoline in the region, at $0.084; Bolivia with $2.0510 follows; Colombia ranks third with $2,138; The fourth is for Ecuador, with 2,400 (see infographic). These values are, in some cases, clarified by the GPP, monitored weekly and in others every month.
In this follow-up, the GPP found that The average worldwide price of gasoline is $4.95. However, these prices vary greatly between countries.
As a general rule, the portal states, “Rich countries tend to have higher prices, while poorer countries and countries that produce and export oil tend to have significantly lower prices. A notable exception is the United States, which is economically weaker. but gas prices are lower. The price difference between countries is due to different taxes and subsidies on gasoline. All countries have access to the same oil prices in international markets, but then decide to impose different taxes. As a result, the retail price of petrol is different.
These low prices have their origin in subsidies. The average price per gallon in countries such as the United States is more than $4, while in the rest of the world the average price of gasoline is $1.39.