We are not yet plumbing new depths – prices have been lower even in this century, even since the founding of the ANH – but likewise there is little beyond perhaps wishful thinking that this is going to stop soon.
The use of US Dollars as a reference for biofuels has meant a substantial increase in the cost of these fuels, raising doubts as to whether increasing the mixture of biofuels in diesels or gasoline is an economically sound decision.
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%.
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