Protests over gasoline price increase: experts say it can be lowered

From 10:00 a.m. today, August 28, a peaceful national mobilization has been called against the increase in gasoline prices, a situation that directly affects the income of all transit workers, such as cab drivers, bus drivers, cargo operators and drivers of transport applications, among others.

Likewise, the situation has an impact on the economy of households, which have had to face a strong inflation for about 2 years.

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Gasoline price increase month by month

Announcements about the increase in the price of gasoline have not stopped coming since October 2022, when the government of President Gustavo Petro stated that the price of fuel was going to increase $200 per month until the end of 2022. In fact, last year the price of gasoline per gallon closed at $9.778.

So far this year, the price of gasoline, which has been increasing $600 per month, already exceeds $13,500 per gallon and the increase is expected to continue for at least three more months, according to statements made by the Minister of Finance and Public Credit, Ricardo Bonilla.

The measure to increase the price of gasoline, according to the National Government, is aimed at closing the deficit of the Fuel Price Stabilization Fund (FEPC).

Likewise, the Ministry of Finance has highlighted that both gasoline and diesel prices in Colombia are among the lowest in Latin America, “due to the operation of the Fuel Price Stabilization Fund (FEPC), which has mitigated the inflationary pressure of the increases in the prices of oil and its derivatives in the last months”.

However, the increases are having a worrying impact on inflation and citizen discontent, and there is a debate on the convenience of Colombia being guided by international prices as a producer country.

Yes, it is possible to lower the price of gasoline so as not to equate it with international prices.

Several voices in national politics, such as that of the representative to the House of Representatives for Bogotá, Jennifer Pedraza, assure that it is possible to lower the price of gasoline, which is composed of taxes and adjusted according to a formula that includes two international variables: 1) the price that Colombia would be paid for selling abroad the gasoline it produces, and 2) the price of the dollar, which has shown a strong volatility for more than a year.

@jenniferpedrazas

¡Si se puede bajar el precio de la gasolina! Acá te contamos de nuestra propuesta. 🤓 ¿Qué piensan de nuestra fórmula? ¿Les suena? 💬 . . . #gasolina #combustible #acpm #carros #motos #preciodelagasolina #colombia #politica #noticia #jenniferpedraza

♬ sonido original – Jennifer Pedraza

The current formula used to establish the cost of gasoline in Colombia includes: the price set by the producer (51%), taxes at national and territorial level (26%), the contribution of biofuel such as ethanol (7%), expenses related to distribution (10%) and other miscellaneous costs (6%), details the Ministry of Mines and Energy.

However, this formula poses two challenges of considerable importance. First, there is the high percentage of taxes, which represents a quarter of the total tariff. Secondly, there is the dependence on international prices expressed in dollars, which is also a critical factor to take into account, especially since most of the national gasoline consumption is supplied with gasoline produced in our country.

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National mobilization against the increase in gasoline prices: Meeting places

In view of the situation, which promises not to stop for at least two more years, according to statements made by Minister Bonilla, the Intergremial Chamber of the Cargo Transportation sector and other transport unions in Colombia called for mobilizations against the increase in the price of gasoline in the country, dubbed as #Gasolinazo28A.

In addition to stopping the price of gasoline, the national mobilization seeks to prevent a similar increase in the price of ACPM. On this issue, Minister Bonilla said the following last month, “the price of diesel is going to start increasing after leveling the price of gasoline. We have four months left. […] For the time being, we are not going to touch diesel in the middle of the electoral campaign”. According to his statements, the Government would begin to increase the price of diesel around November of this year.

The rallies to start the peaceful national mobilization against the increase of gasoline prices in Colombia are scheduled by cities:

• Bogota: the meeting point is the Virgilio Barco Library and 13th street for cargo transportation.
• Cali: the meeting point is at Parque de las Banderas, next to the Stadium.
• Medellín: the mobilization will start at the Punto Cero viaduct.
• Bucaramanga: from Puerta del sol and Mesón de los Búcaros.
• Floridablanca: Abadías.
• Girón: Puente Flandes.
• Pasto: the meeting point is in Chapultepec, exit at the Panamericana highway.
• Villavicencio: from Porfía service station.
• Cúcuta: Plaza de las Banderas, next to the General Santander stadium.
• Cartagena: from the El Amparo station.
• Mocoa: at La Reserva station.

Prices of ACPM will also increase.

According to a communication from the Ministry of Finance and Public Credit this morning, August 28, the price of ACPM remains unchanged, which has been at $9.065 per gallon for several months.

However, as stated by the organizers of the mobilization, the nationwide protests, in addition to demanding that the price of gasoline not be increased any further, seek to prevent the price of ACPM from following the same path of increases.

Let’s remember that vehicles that operate with ACPM in our country are heavy transport, cargo and passenger vehicles, so that an eventual increase in the price of ACPM at the end of 2023 would have an impact on the price of several goods and services of daily consumption.

In turn, and after cab drivers confirmed their participation in today’s mobilizations, the representative of the drivers of transport applications, Amai Camacho, president of ConduApp said, “that the State guarantees and recognizes that there is a popular economy here, and that people who live all the time working with their vehicles, with their motorcycles, with their cars, with their trucks, are going through strong needs. It is no longer the same to say that we pay $9,000 as to say that we pay $14,000 [per gallon]. And then, up to what point are we going to reach, $16,000?”

Keep reading: Price of gasoline in Colombia: why is it expensive, what are the implications and where is it going?