The Ministry of Mines and Energy (MinMinas) reported that once gain fuel prices will start to increase after successive drops in recent periods. The international price of fuel and increased biofuel costs were cited as the reason.
The fall in oil prices has set off a chain reaction which started in the producing regions but has now made its way much further and is changing the economic and social reality of the country.
About twice a year we have a reason to publish a long term graph with oil prices in real terms going back to 1986. We had heard of but not found a series going back to the 1920s. Last week at the Association International of Petroleum Negotiators (AIPN) meeting in Bogotá, we saw a graph going back to 1861. The source for this proved easy to find and so appears above.
Although there has been a slight recovery of oil prices to the high US$30 range, analysts believe that Colombian operators need prices at US$45 or higher to reactivate stalled exploration activity.
With 4Q15 results now published for Colombia-committed, publicly traded companies, we could update this graph which shows the average offset or discount to Brent that these companies obtained. This shows that companies receive (on average) about US$10 below whatever Brent is in the quarter.
The Ministry of Mines and Energy updated its fuel prices for April 2016, and announced a drop for diesel and an increase for gasoline starting April 5th. Just four days prior, the ministry said there would be no change to prices for April but also said that might change.
We always reserve this spot for our monthly rant about the government’s fuel price formula. New fuel prices are announced on or about the first of the month. But apparently because there is no real MinMinas (the minister in charge, María Lorena Gutiérrez, is only concerned with the electricity crisis), the ministry decided to maintain prices where they were in March. We take the opportunity to update our producer price index graphs.
Ecopetrol’s (NYSE:EC) exports to the US dropped off at the end of 2015 according to the company’s latest financial report, matching a US trend to import less crude and derivatives.
A shifting rationale and regulatory framework have meant that Colombia’s biofuels industry has lost its momentum, and industry associations say the government has not kept its end of the bargain.
The export of crude oil and derivatives totaled US$576M in January 2016 and accounted for 31.3% of the commercial export value of the country, but have also shown a substantial drop in value and are selling below global benchmark prices.
2025, Hydrocarbons Colombia, All Rights Reserved.
