2024-09-06 10:25:28
After four days of negotiations between the National Government and the transport sector, proposals continue to be made to reach an agreement that will allow the price of ACPM (diesel) to be adjusted and, thus, put an end to the protests that have blocked several roads in the country since last Sunday.
The Minister of Finance, Ricardo Bonilla, emphasized during his speech at the IX Colombian Business Congress (CEC), organized by ANDI, that ““The blockades affect inflation more than the increase in the price of diesel”According to the minister, inflation is more affected by the disruption of logistics chains than by the gradual adjustment of fuel prices.The right decision is to close the gap and make fuel prices float as they were before 2020when it was adjusted monthly and the country had forgotten about its inflationary problems,” he said.
One of the key points in the negotiations has been the transport sector’s proposal for a moderate increase in the price of diesel of $400 per gallon.while discussions continue at negotiation tables. In turn, the Government has proposed an alternative: replacing the increase of $1,904 announced on August 31, with staggered adjustments of $200 per month from September to December 2024, which would accumulate a total increase of $800 by the end of the year. The Government would review new adjustments starting in January 2025.
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Bonilla stressed that one of the priorities is to reduce the deficit of the Fuel Price Stabilization Fund (FEPC)). Despite significant increases in gasoline between 2022 and 2024, diesel prices have remained frozen for 56 months. The diesel deficit is estimated to have reached $15 trillion in 2023, and by 2024, the figure is expected to be between $11.6 and $12 trillion, implying a monthly burden of $1 trillion in subsidies.
The government also projects that inflation will close 2024 at 5.5%, while the Bank of the Republic’s intervention rate could end the year at 8.5%. To achieve these objectives, Bonilla pointed out the importance of reducing the monetary policy rate by 75 basis points in the next three meetings of the central bank.
During his speech, Bonilla highlighted the progress in agrarian reform and the purchase of 142,903 hectares at market price, as well as the titling of 1.13 million hectares.He also stressed that the Government has complied with the payment of three of the eight outstanding installments with the International Monetary Fund (IMF), in relation to the US$5.4 billion credit granted during the Covid-19 pandemic.
The government and the transport union will continue to hold talks to find a solution that will allow the blockades to be lifted and the situation on the country’s main roads to return to normal.
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