News and AnalysIs for

Oil prices for the critical fourth quarter started on the right foot in October with Brent at its highest average since August of 2015. But sentiment turned last week and the indicators are not good for November.

The Senate’s Fifth Commission held a debate to discuss “the war between foreign companies and retailers of the fuel market”, which touched upon issues like market consolidation and how fuel prices are determined.

In August 2015 Colombia imported US$479.2M in fuels and other products for extractive industries, and in the same month of this year that number grew 6.3% to US$509.6M, led by purchases of kerosene and light oils, even while the Cartagena Refinery (Reficar) grew its output.

The number of vehicles converted to natural gas continues to grow, albeit at a slower and still slowing rate. Does supply uncertainty play a role?

The administration of the Minister of Mines and Energy Germán Arce has opted for a different approach to figuring monthly fuel prices to keep the changes to the minimum, and is now studying how to change the pricing formula to remain as stable as possible.

The Ministry of Mines and Energy (MinMinas) has frozen the price of biofuels which it uses in its special fuel price formula. Palm growers and their association Fedepalma rejected the measure and warned that it will bring substantial losses for their industry.

The Ministry of Mines and Energy (MinMinas) left fuel prices untouched for the month of October, with observers saying that stable international prices do not make it necessary to adjust Colombia’s prices.

The Cartagena Refinery (Reficar) expansion is not enough, warns the Colombian Petroleum Association (ACP), and if refining capacity is not expanded, by 2040 Colombia could be importing half of its fuel and gasoline.

During the first half of 2016, crude exports from Colombia to the United states increased by 82,000bd, to reach a total of 520,000bd. This amounts to a 18.72% increase compared to the same period last year.

Pending changes which will be announced by the Energy and Gas Regulation Commission (CREG) between October and November could mean lower biofuels rates, which has producers concerned.