The Ministry of Mines and Energy (MinMinas) announced lower prices for both gasoline and diesel, while the transportation sector called for the changes to be implemented over a longer period of time, and called for more attention from the state.
Benchmark oil prices continue their downward slide hurting company results and Colombian government coffers.
A recent study by the World Energy Council in Latin America found that 74% of those surveyed would agree to pay more on a monthly basis for fuels with cleaner emissions. However that support quickly dropped as the extra cost increased.
The government’s fiscal plans are being squeezed by the downward trend of the WTI and Brent oil prices. Estimates are that for every dollar the price drops, the fiscal impact in revenues amounts to CoP$420B (US$220.8M) over the year.
Senator Juan Diego Gómez, of the conservative party, wants to hold a debate in the Senate’s Fifth Commission on the issue of fuel quality to analyze issues surrounding Ecopetrol’s (NYSE:EC) refining of fuels in Colombia.
Both the Minister of Mines and Energy (MinMinas) Tomáz González and the Colombian Petroleum Association (ACP) have chimed in on the falling price of oil, which both say could have a strong impact on government budgets if production does not increase to compensate, along with reserves.
The Minister of Mines and Energy Tomás Gonzalez said the government’s current formula to set the price of gasoline and diesel is working and no new fuel law is being considered. The transportation industry reacted calling for a review of the formula and taxes.
With the global price of oil falling to below US$90 a barrel, the government has a new problem on its hand beyond the usual triad of licensing, social conflict and security. Just based on the price difference, the national budget could be CoP$12.5T (US$6T) short of the Ministry of Finance (MinHacienda) projections
A number of villages in Yopal have rejected Parex Resources (TSX:PXT) Crytpo-1 project on grounds it would affect the water supply, while the company says the community will not hear their side of the story and assures the water would be safe.
As the US approaches self-sufficiency, the need for Colombia oil imports diminishes somewhat. A concern but not yet a problem.
2025, Hydrocarbons Colombia, All Rights Reserved.
