The Price of Gasoline in Colombia is the Fourth Cheapest in Latin America

Colombia is embroiled in a controversy over gasoline prices. However, the fuel cost is not among the highest in Latin America. The government-planned price hikes have stirred significant social discontent, but the current price of 13,700 pesos per gallon positions Colombia as the country with the fourth lowest fuel price in the subcontinent.

Reduction of Gasoline Subsidies

The government under Gustavo Petro aimed to eliminate the substantial expense that state subsidies incur for fuel prices. The measure was controversial from the outset. Nevertheless, the government estimated the state’s spending on this subsidy to be 31 trillion pesos for 2021. Just for 2022, the deficit generated in this area was equivalent to 2.5% of Colombia’s GDP. The idea, therefore, is to correct the significant deficit that the Iván Duque government left in this regard.

In this context, Colombia established a gradual reduction in the subsidy, likely to reach a value of 16,000 pesos per gallon. By August, the price is already above 13,700 pesos. The increase began in October, with a 200-peso reduction in subsidy. In January 2023, an additional 400 pesos were deducted, leading up to the 600-peso reduction in August. In addition to this, the rise in crude oil prices in international markets needs to be factored in.

Forecasts by the Minister of Finance, Ricardo Bonilla, indicate that the price will continue to increase, although he also states that the limit is already near. Bonilla set that cap between 15,000 and 16,000 pesos per gallon.

Price Comparison in the Region

Among all countries in Latin America, Uruguay stands as the country with the highest fuel prices. For this August, the price per gallon is above 28,000 Colombian pesos. On the other hand, Venezuela has heavily subsidized fuel, priced at 64 pesos per gallon. Clearly, it is the region’s most affordable country.

After Venezuela, only Bolivia, at 8,300 pesos, and Ecuador, at 9,730 pesos, surpass Colombia in the list of cheaper prices.

Gasoline, a Sensitive Issue

Among various complaints, the most recent protest was the taxi drivers’ strike on August 9th. Professionals complain that constant price increases have led to a decrease in their income. The taxi union demands the implementation of a differential rate for fuel.

Individual public transport professionals reminded President Gustavo Petro that this was a promise from his campaign. With the price hikes over the past year, taxi drivers are asking the government to fulfill its promise. The creation of that differential rate, they argue, would help alleviate expenses in the taxi sector.