Home » This will have to pay for gasoline with a gradual increase from October to $400

This will have to pay for gasoline with a gradual increase from October to $400

by archyde

Fendipetróleo’s calculations say that if you live in Bogotá, today people pay an average of $9,176 per gallon. But LR knew of a study that the Government evaluates, which speaks of gradual increases.
From the project, the Ministry of Finance confirmed that the series of increases begin in October with $400. However, it is pending to define whether it would be a series of consecutive hikes and for how many months.

The formula suggests the monthly increase, that if it started in October, at least in Bogotá it would go from those $9,176 on average to $10,376 to close the year, but in the Government they evaluate if the increase should have a consistent increase of five months. That is to say that in February, in the capital the rate would reach $11,176.

With a formula based on $400 each month of increase, between October and December, in the main regions besides Bogotá, an average of $10,703 would be seen at the end of the year in Antioquia (and $11,503 in February), and for example, gasoline it would climb to $10,479 in Valle del Cauca and $11,279 in February.

Rise by regions and not national
Based on the Fendipetróleo price report, which shows the most expensive areas for fuel, today the most expensive gasoline is in Vaupés with a gallon of $17,403, there with an increase to December it would reach $18,603 and in February to $19,403. “That is totally unsustainable for one of the poorest departments in Colombia, that is why the Government is studying this model, and it is not ruled out, as the Splice Commission thought, that it be an increase by regions and not a standard at the national level”added Sergio Matíz, a hydrocarbons analyst at the National University.

The same is repeated in Guainía, Amazonas, the San Andrés archipelago, and Caquetá, which are departments that participate in the national GDP with less than 0.5% according to the Dane report for the first semester.

The collateral effect according to the Government
In the update of the first quarter of the Autonomous Committee of the Fiscal Rule, it shows that for every 1% increase in gasoline prices, there would be an adjustment of at least 0.05% or 0.08% in inflation.

even for that the adjustment is not so immediate, the technical analysts of the Ministry of Mines also see that this increase does not necessarily have to be for each consecutive month, there is even talk of a bimonthly to quarterly increase, but the truth is that it would need at least between four and five adjustments to the rates so that it can generate a peso to the deficit of the Price Stabilization Fund (Fepc), which according to the Ministry of Finance, in 2021 the Fund registered a shortfall of $11.7 billion, of which the Nation paid $3.9 billion. And for this year the fiscal vacuum is projected to reach US$35 billion.

Even so, the energy and hydrocarbon unions are among the first to support the increase. Juan Carlos Vélez Uribe, president of Fendipetróleo explained that “the situation of the Fepc is unsustainable, this deficit for us, according to the accounts, is $27 billion, each day that this issue is not resolved the amount will be higher, there will be no resources with which to pay it, the The increase in fuels would have to be immediate and not gradual”. He also recalled that “in Colombia we are paying one of the lowest prices in the region, the average in Latin America is at least $16,000,” he added.

Even for this reason, the Ministry of Finance sees price adjustments with good eyes, and in fact would seek that the rate decree be applied as soon as possible. “I am clear that it must be a gradual adjustment, both for gasoline and diesel should be considered and measure the impact on inflation. One of the points of the previous government for which the subsidy was not dismantled was inflation, an increase not well calculated in the fuels translates into a higher CPI. Unfortunately from the fiscal point of view it is necessary to do it, but from the economic situation it is not the best time,” said Francisco Lloreda, president of the Colombian Petroleum Association ACP.

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