2024-08-22 03:54:35
The Ministry of Finance and Public Credit, headed by Ricardo Bonilla González, has confirmed an increase in the price of diesel that will reach $6,000 in total, distributed in three increments of $2,000 each. The first adjustment will be made at the end of 2024, followed by two more throughout 2025.
This measure was taken unilaterally by the Government after failing to reach an agreement with the transport unions, who have been firm in their opposition to the revision of the price of diesel fuel, frozen since 2020.
«We are facing a gap of $6,000 in the price of diesel. Despite attempts to negotiate with the transport unions, we have not reached a consensus.“This adjustment is necessary to begin to close the ACPM deficit in the Fuel Price Stabilization Fund (FEPC),” said Bonilla González.
The Minister explained that the first increase of $2,000 will be applied before the end of the current year, followed by a second increase in mid-2025. and a third at the end of that same year. Unlike the closure of the gasoline deficit, which was managed with monthly adjustments, the diesel deficit will be implemented in three phases to mitigate the impact on freight costs, affecting mainly large consumers such as transporters.
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Justifications for the increase
Bonilla González explained that the price of diesel has remained frozen since January 1, 2020, a decision that was not a consequence of the pandemic, but was taken previously.If we had adjusted the price of diesel to the level of freight transport, today it would be at $11,600, but currently it is at $9,600. This represents an unfair subsidy that has not been adjusted, affecting inflation.“, said the Minister.
The freezing of fuel prices occurred in a context of rising international oil prices. However, this increase in production costs was not passed on to the end user, generating a growing deficit in the FEPC, a debt that the Government has had to assume.
At the end of 2023, the FEPC deficit amounted to $100.3 billion, of which 73% corresponded to the last two years. During 2023, the Government cancelled $19 trillion in the form of this deficit.
“Increasing the price of diesel will be an unpopular measure, but a necessary one,” said Minister Bonilla, recalling that since October of last year attempts have been made to negotiate with the transport unions, without success.
Finally, Bonilla concluded that, although current inflation stands at 6.86%, it is expected to drop to 5.5% by the end of 2024, helped by the closing of the gap in fuel prices, which could allow the Bank of the Republic to reduce the reference rate from the current 10.75% to 8.5% by the end of the year.
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