2024-07-06 02:47:05
In recent months, Colombia has experienced a sustained increase in the price of gasoline, significantly affecting various economic and social sectors. According to the latest DANE report, the price of fuel for vehicles has shown an upward trend since 2016, with an even more pronounced increase after the end of the pandemic.
HUILA DAILY, ECONOMY
BY: ALEJANDRO POLANCO
The recent truckers’ strike in Nariño has highlighted the deep repercussions of this crisis. The protesters, led by the Colombian Truckers Association, have blocked five points of the Pan-American Highway, preventing the entry and transit of goods and food into the region. The reasons behind these demonstrations include the poor condition of the road infrastructure, the insecurity on the roads and, crucially, the increase in the price of diesel and the high costs at the Contadero and Josefina tolls in the department.
The blockade has caused serious problems in different aspects of the daily life of the people of Nariño. The already scarce supply of gasoline forced local authorities to decree special rationing measures. At the service stations, the lines are long and fuel is only allowed between 8:00 am and 8:00 pm, with limited quantities: $20,000 for motorcycles, $50,000 for private vehicles, $60,000 for official vehicles, and $100,000 for public services and ambulances. This critical situation serves as an alarming precedent for the rest of the country, where the increase in the price of fuel threatens to trigger similar effects.
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Repercussions in the Department of Huila
The increase in the price of gasoline has also had a significant impact on the department of Huila. In Neiva, for example, the price of gasoline has reached nearly $16,000 per gallon, which represents an increase of approximately $6,500 in the last year. This increase has affected multiple sectors of the local economy, including transportation, agriculture and commerce.
The transport sector has been one of the hardest hit. Transporters have had to adjust their rates to cover the additional costs of fuel, which has directly affected the pockets of users and the competitiveness of local products in foreign markets. In addition to fuel costs, transporters face high toll costs, which further aggravates their financial situation.
Impact on Agriculture
Agriculture, one of Huila’s main economic activities, has also been affected. Farmers rely heavily on gasoline for machinery and transportation, and rising fuel costs have reduced their profit margins. This could translate into an increase in the prices of agricultural products, affecting both local producers and consumers.
Farmers also face additional challenges due to adverse weather conditions and competition in domestic and international markets. Rising fuel costs exacerbate these difficulties, putting the viability of many farms in Huila at risk.
Possible breaking point
El Diario Del Huila spoke with Luz Mila Moyano, executive director of Combusur, who said that the situation in Nariño is parallel to what is happening in the department of Huila, where transporters also face high costs due to the numerous tolls and the rising price of fuel. “In the region, there are at least four tolls on the route to the south, which represents a considerable expense for transporters,” she said.
Moyano also assured: “The problem of high fuel and toll costs is a national concern. In 2021, Huila also experienced blockades due to similar problems. Unlike the increase in gasoline that mainly affects ordinary drivers, the increase in diesel affects transporters who move food and other essential goods.”
For the board, the increase in fuel prices has been notable. In Huila, the price of gasoline went from 10,557 pesos in 2023 to 15,927 pesos in June 2024, which represents an increase of 51% in 18 months. Although diesel has only increased by 306 pesos in the last year, its projected increase could trigger more blockades and protests throughout the country.
“Concern is evident among transporters, as diesel is essential for their daily operation. The impact of these additional costs could result in increases in the prices of transported goods, affecting end consumers throughout Colombia. In addition, tolls continue to be a point of conflict. Huila is the department with the most tolls, and the installation of a new toll in Hobo is expected and this will only add more pressure on transporters and could trigger new protests.” He concluded.
The increase in the price of gasoline in Huila is a reflection of the economic challenges facing the entire country. The search for a balance between economic stability and the well-being of the population will be crucial in the coming months. However, the country’s economic projections indicate an expected growth of between 1.8% and 2% for 2024, which, although positive, does not eliminate the current challenges.
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The role of the Bank of the Republic in how to avoid an increase in inflation plays a fundamental role. It is important to remember that the basis of this problem that Colombia had and has is that in 2020 the price of fuel was frozen.
Disturbing Solutions
In response to the uncontrolled increases, the national government has announced several routes to mitigate the impact of the gasoline price increase. These include temporary subsidies and support programs for key sectors such as transportation and agriculture. However, many consider these actions insufficient and demand more sustainable long-term solutions. Civil and trade organizations in Huila have raised their voices, asking the government to review energy and tax policies.
Transporters and farmers have proposed the implementation of broader subsidies and a reduction in the tax burden on fuel as immediate measures to ease economic pressure. Investment in road infrastructure to improve road conditions and reduce transport costs, as well as the collection of tolls, has also been suggested.
The impact of the increase in the price of gasoline in Huila and in Colombia in general is a sign of the economic and social challenges that the country faces. The search for a balance between economic stability and the well-being of the population will be crucial in the coming months. Meanwhile, the people of Huila continue to adapt and look for alternatives to face this new economic reality.