Government to propose new scheme for setting fuel prices

This Wednesday, the national government presented a new strategy to seek solutions in the short and long term to the current situation of the Fuel Price Stabilization Fund (FEPC), which, due to the current situation of rising international oil prices and exchange rate levels, is accumulating high deficits.

For this reason, the Government decided not to apply the formula for calculating the reference values of gasoline and diesel, in tandem with the rise in international crude oil prices and based on the price of the dollar.

A draft decree will be drafted with a new proposal for a fixing methodology and a price convergence path.

In addition, he assured that at the cut of the first quarter that balance in red reached $14.1 trillion pesos. Of this outstanding deficit figure, 7.8 trillion pesos corresponds to the second half of 2021 and 6.3 trillion pesos to the first three months of 2022 alone, which shows the magnitude of the impact of the increase in oil and oil products.

For his part, the Minister of Mines and Energy, Diego Mesa, indicated that “having increased the price, especially, of diesel would have had a direct channel of greater inflationary pressure for food prices, affecting mainly lower-income households. Part of what we're doing is trying to protect the income of the most vulnerable segments of the population. Inflationary pressure is a global phenomenon and all countries are looking at how they can use public policy tools to protect the population from these pressures.”

The increase in inflation in Colombia, which according to the National Administrative Department of Statistics (Dane) was 8.53% last March, has affected the purchasing power of Colombians in recent times. With the prices of many foods skyrocketing, it is becoming increasingly difficult to buy the same amount of products as in previous periods.

According to the bank's official reports on the Consumer Price Index (CPI), between January and March of this year, the food and non-alcoholic beverages category continued to drive inflation, with a 10.22% increase in consumer prices during the first quarter, with potatoes being the product whose cost increased the most: 54.68 per cent.

The tuber was followed by onions as one of the foods that have had the highest price increase so far this year. Meat, poultry, vegetables, fruits, cereals, eggs and processed products also increased in value, according to the above-mentioned report.

Camilo Herrera, director of Raddar, a firm specializing in consumer analysis, confirmed these indications: “A good number of Colombian households have significantly reduced their ability to buy compared to last year.”

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