Diesel Price to Increase by 8,000 Pesos in Colombia after February 2024

Colombia has announced an increase in the price of diesel by 8,000 pesos, to be implemented gradually starting in February 2024. Following the controversy over significant increases in gasoline prices over the past year, diesel is now also losing its state subsidy.

Finance Minister Ricardo Bonilla has stated that the process of raising diesel prices will last between 18 and 24 months. The minister defended this 8,000-peso increase per gallon to align the country’s prices with international levels. “We cannot postpone this; it costs the state too much, but let’s negotiate,” Bonilla said to the transporters.

Depending on whether the increase is spread over 18 or 24 months, the government plans for monthly increments ranging from 350 to 450 pesos until the full 8,000-peso increase is reached. The government’s goal with these controversial measures, which impact the wallets of all citizens, is to close the gap caused by subsidizing fuel from public finances.

According to projections, the deficit from this subsidy would be 20 trillion pesos for the year 2023; for 2024, the gap would be reduced to 4 trillion pesos, and it would be eliminated entirely starting in 2025.

Sensitive Fuel Prices

There is significant dissatisfaction in Colombia following the substantial increases in gasoline prices over the past year. Gasoline prices have risen by almost 5,000 pesos in the last 12 months. Although these increases were planned and gradual, the public discontent has been considerable. So far, the only group that has secured a special price for fuel is taxi drivers, after much controversy, protests, and tough negotiations.

Meanwhile, the transporters’ union, concerned about rumors of diesel price increases, questioned the minister about the future of this type of fuel during the 48th Congress of the Colfecar cargo transport union. The minister responded that taxes would not be changed but confirmed an escalation in prices starting in February, following the government’s decision to end subsidies.

“As we have said for a year, once we resolve gasoline, we will start talking about diesel. The diesel gap is 8,000 pesos, that’s what needs to be raised, but it doesn’t mean an immediate increase; we need to plan it, we don’t want to catch anyone by surprise, and I think we can agree on this,” Minister Bonilla clarified.

Minister Rules Out Manipulating Biodiesel

Regarding the transporters’ proposal to reduce the biodiesel blend in diesel from 10% to 5%, the Finance Minister has completely ruled out this option. Although the government had been considering this possibility for some time, it has ultimately been rejected due to its environmental consequences.

“Biodiesel is more expensive than diesel, but there’s an environmental discussion. We could remove biodiesel and leave only diesel, which would reduce costs, but what about the environmental impact? What we can consider is paying for biodiesel at international prices rather than national ones, as it is currently more expensive locally,” explained Ricardo Bonilla to the transporters.