The government announced a slight drop in fuel prices as it covers shortfalls in the fuel stabilization fund, which has politicians and the fuel industry retailers calling foul.
Benchmark crude oil prices peaked in the week of June 14 to 20 and have fallen virtually every week since then.
The Meta department is home to the lion’s share of oil production in Colombia, which local leaders say make it dependent on the industry and vulnerable to drops in the final price of a barrel. Some are calling for the government to contribute more to agricultural industries to compensate.
The attention always goes to crude oil production which gets the headlines. But there are worrisome trends in gas production as well.
With oil prices falling, investment for new projects from foreign investors is being pinched, which will leave its mark on Colombia and the country’s ability to compete for attention in a market where supply overwhelms demand.
Terpel’s Gazel chain says that it expects that within 5-10 years there will be up to 30,000 buses and trucks running on natural gas instead of diesel.
The government’s formula to fix gasoline prices aims for stability despite changes in the international price of oil, for better or worse. But some are questioning who is benefiting when oil prices have dropped over 20% in the last six months, but fuel prices less than 2%.
With two new large biofuels refining plants planned for 2015 and 2016 and regulations that will increase the ethanol mixture in gasoline to 13.6% next year, the consumption of biofuels could grow by more than 50% in two years, says the president of the National Fuels Federation (Fedecombustibles) Jorge Bendeck.
The former Ministry of Mines and Energy, Amylkar Acosta, says considering the decrease in oil prices Ecopetrol (NYSE:EC) and the industry must lower costs and guarantee a functioning pipeline system in this new scenario.
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