News and AnalysIs for

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.

Fuel prices fell again in March, but the authorities still cannot shake the questions from consumers and press as to why they have not fallen further if oil prices are down substantially.

Colombia’s crude production is represented largely by Castilla and Vasconia crude, which have suffered even greater falls in value than the Brent or WTI benchmarks, meaning that with those latter prices hovering above US$30/barrel, production is barely profitable.

The high prices of sugar and the devaluation of the peso against the dollar have led ethanol producers to losses, said the biofuels industry association Fedebiocombustibles.

The El Niño weather phenomenon has meant the highest use of thermal energy generation in Colombia’s history, says the director of Jorge Valencia Marín of the Mining Energy Planning Unit (UPME). However he assures that the grid is working fine, and the historic use is still “normal”.

The Association of Large Energy Consumers (Asoenergia) says a planned regasification plant for Cartagena does little to address the energy issues, and called on the government to follow through with a reform of the distribution of the “reliability charge”.

The Bank of Bogotá produced a report in which it detailed the impact of four different oil price scenarios, and how these would affect the Colombian peso to US dollar exchange rate exchange rate, and as a result, government finances.