Colombia: the unstoppable rise in the price of once cheap gasoline

Colombian motorists are facing an unprecedented increase in gasoline prices, following the removal of government subsidies. This decision aims to reduce the public deficit and promote a sustainable environmental policy, but it has led to high inflation and criticism from citizens.

Share:

Gain full professional access to energynews.pro from 4.90€/month.
Designed for decision-makers, with no long-term commitment.

Over 30,000 articles published since 2021.
150 new market analyses every week to decode global energy trends.

Monthly Digital PRO PASS

Immediate Access
4.90€/month*

No commitment – cancel anytime, activation in 2 minutes.

*Special launch offer: 1st month at the indicated price, then 14.90 €/month, no long-term commitment.

Annual Digital PRO Pass

Full Annual Access
99€/year*

To access all of energynews.pro without any limits

*Introductory annual price for year one, automatically renewed at 149.00 €/year from the second year.

Accustomed to some of the cheapest gasoline in Latin America, Colombian motorists are experiencing an unprecedented price increase since the phasing out of state subsidies that increased the public deficit and went against environmental promises. The price at the pump began to rise in October 2022, two months after the election of the country’s first leftist president, Gustavo Petro, and has now risen 28%, the largest increase in four years. On May 2, a gallon of gasoline (about 3.8 liters) cost 2.35 euros. Never before seen.

The State Fuel Stabilization Fund was created in 2007 to subsidize the cost of gasoline. It cost 3.8 billion euros to the public finances in 2022. To reduce this cost and pay off the total debt generated by the Fund, which amounts to more than 7 billion euros, Mr. Petro has chosen to eliminate subsidies, thereby mechanically increasing the price of gasoline. Continuing to subsidize gasoline would run counter to the government’s “sustainable” environmental policy, which calls for the suspension of oil and gas exploration projects. And the savings made should allow for investment in social issues, in the name of the “change” promised during his campaign.

But this blow to the wallet of the Colombian motorists is added to an inflation never seen since a century (13,34% in interannual). “Petro betrays the workers,” say some Internet users, according to AFP’s fact-checking service, which analyzed the disgruntled reactions shared on social networks. Others, on the other hand, point to the policies of former President Ivan Duque (2018-2022) “who left the Price Stabilization Fund with a deficit of 15 billion” pesos (2.9 billion euros).

A continuing deficit

Experts told AFP that this financial imbalance is due to the difference between the domestic price of gasoline, subsidized by the state, and its price on international markets. Colombia produces 80% of its fuel through its national company Ecopetrol, but buys fuel at international market prices. Buying cheaper from the national company would impact tax revenues and would not be a solution, according to hydrocarbon expert Sergio Cabrales: “it would be another form of subsidy. The situation worsened in 2022 with the end of the Covid-19 pandemic, leading to an increase in global fuel demand and the price of oil on international markets.

This was compounded by a reduction in supply as a result of the economic sanctions imposed on Russia after the invasion of Ukraine. In April 2022, the Colombian Autonomous Committee of Fiscal Regulation did recommend a domestic price increase, which the government of Ivan Duque did not follow before the elections, leaving it to his successor. In September 2022, before the first increase of the Petro government, the Minister of Mines and Energy, Irene Vélez revealed a deficit of about 3.24 billion euros accumulated since April 2022. Figures confirmed to AFP by the Minister of Finance of former President Duque, Jose Manuel Restrepo, in office from 2021 to 2022, indicating that his ministry has only made up the accumulated deficit until March 2022.

However, the increases in fuel prices decreed by Gustavo Petro are not only aimed at making up for this deficit left by his predecessor. In the long term, the aim is to gradually reduce the difference between domestic and international prices. But the current increase will not be enough, according to Julio César Vera, an expert in the regulation of the hydrocarbon sector. “To achieve parity with international prices, the price of a gallon of gasoline should be set at 15,500 pesos (3.10 euros),” he says. The government acknowledges that it wants to move towards this parity. The current and new Minister of Finance, Ricardo Bonilla, recently announced that the price of a gallon of gasoline will have to reach 3 euros. To the great displeasure of motorists. For the moment, the price of diesel, used in the transport of raw materials, has not been increased so as not to influence an already galloping inflation.

A drone attack on a Bachneft oil facility in Ufa sparked a fire with no casualties, temporarily disrupting activity at one of Russia’s largest refineries.
The divide between the United States and the European Union over regulations on Russian oil exports to India is causing a drop in scheduled deliveries, as negotiation margins tighten between buyers and sellers.
Against market expectations, US commercial crude reserves surged due to a sharp drop in exports, only slightly affecting international prices.
Russia plans to ship 2.1 million barrels per day from its western ports in September, revising exports upward amid lower domestic demand following drone attacks on key refineries.
QatarEnergy obtained a 35% stake in the Nzombo block, located in deep waters off Congo, under a production sharing contract signed with the Congolese government.
Phillips 66 acquires Cenovus Energy’s remaining 50% in WRB Refining, strengthening its US market position with two major sites totalling 495,000 barrels per day.
Nigeria’s two main oil unions have halted loadings at the Dangote refinery, contesting the rollout of a private logistics fleet that could reshape the sector’s balance.
Reconnaissance Energy Africa Ltd. enters Gabonese offshore with a strategic contract on the Ngulu block, expanding its portfolio with immediate production potential and long-term development opportunities.
BW Energy has finalised a $365mn financing for the conversion of the Maromba FPSO offshore Brazil and signed a short-term lease for a drilling rig with Minsheng Financial Leasing.
Vantage Drilling has finalised a major commercial agreement for the deployment of the Platinum Explorer, with a 260-day offshore mission starting in Q1 2026.
Permex Petroleum has signed a non-binding memorandum of understanding with Chisos Ltd. for potential funding of up to $25mn to develop its oil assets in the Permian Basin.
OPEC+ begins a new phase of gradual production increases, starting to lift 1.65 million barrels/day of voluntary cuts after the early conclusion of a 2.2 million barrels/day phaseout.
Imperial Petroleum expanded its fleet to 19 vessels in the second quarter of 2025, while reporting a decline in revenue due to lower rates in the maritime oil market.
Eight OPEC+ members will meet to adjust their quotas as forecasts point to a global surplus of 3 million barrels per day by year-end.
Greek shipping companies are gradually withdrawing from transporting Russian crude as the European Union tightens compliance conditions on price caps.
A key station on the Stalnoy Kon pipeline, essential for transporting petroleum products between Belarus and Russia, was targeted in a drone strike carried out by Ukrainian forces in Bryansk Oblast.
SOMO is negotiating with ExxonMobil to secure storage and refining access in Singapore, aiming to strengthen Iraq’s position in expanding Asian markets.
The European Union’s new import standard forces the United Kingdom to make major adjustments to its oil and gas exports, impacting competitiveness and trade flows between the two markets.
The United Kingdom is set to replace the Energy Profits Levy with a new fiscal mechanism, caught between fairness and simplicity, as the British Continental Shelf continues to decline.
The Italian government is demanding assurances on fuel supply security before approving the sale of Italiana Petroli to Azerbaijan's state-owned energy group SOCAR, as negotiations continue.

Log in to read this article

You'll also have access to a selection of our best content.