Gradual increases in the price of gasoline could go until 2024 – Sectors – Economy

2023 began with an increase of approximately 400 pesos in the price of gasoline paid by Colombians. In this way, complete an increase of 1,000 pesos in the last four months, since between October and December it was 200 pesos each month.

But drivers need to prepare because the price per gallon will continue to rise. The National Government plans to continue making “gradual and progressive” increases which could go until 2024.

(Also read: These are some products and services that increase in price in 2023)

These increases seek to reduce the fiscal deficit of the Fuel Price Stabilization Fund (FEPC) through which the cost of gasoline and diesel is subsidizedsince the Nation assumes the fuel price differentials between the local market and those of international reference.

This means that for years Colombians have been paying less than what they can really afford for a gallon of gasoline and diesel as a result of the international increase in the prices of liquid fuels, derived from a higher price of crude oil, the increase in refining margins and the depreciation of the peso.

“Price differentials are projected to close in early 2024 for regular gasoline, and at the beginning of 2025 for the ACPMwith which the Government would ensure that the spending pressure associated with the FEPC disappears during the four-year period,” said the Ministry of Finance in the update of the 2023 Financial Plan.

(Also read: 2022 closed with a drop in the sale of new cars)

In this way, it is expected that in 2023 and 2024 the transfer made by the Nation for this item will be 1.7 percent of the Gross Domestic Product (GDP)value that will decrease (in line with the contemplated price increase) to 0.5 percent and 0.1 percent of GDP in 2025 and 2026, respectively.

In addition, it is estimated that during 2022 the FEPC will register an expense for compensation differential of approximately 37 trillion pesos. Of this, there will be by 2023 a account payable of about 26.4 trillion pesoscorresponding to the compensation differential caused between the second and fourth quarters of 2022.

The cities with the highest prices

With the rise of 400 pesos in the price of gasoline, in most major cities the gallon is costing more than 10,000 pesosthe highest cost in the history of Colombia.

Taking into account the 13 main cities of Colombia, The most expensive gasoline will be sold in Villavicencio, where it is at 10,623 pesos. They are followed by Cali (10,559 pesos), Bogotá (10,523 pesos) and Manizales (10,513 pesos).

On the contrary, the lowest prices are those of cities located in the border area, such as Cúcuta (8,575 pesos) and Pasto (8,916 pesos), since they have several tax benefits.