President Gustavo Petro announced this Sunday morning that gasoline prices will rise in Colombia. The president explained this because there is a huge deficit in the national budget due to “an increasing subsidy to gas consumers”.
In his post on Twitter, Petro said, “The fuel price stability gap caused by the previous government’s non-payment is 10 billion per quarter. That’s about 40 billion a year. That’s almost half of the national budget deficit. This is due to the gasoline price not being raised on the account.
In his message, the president also stated that “half of the national budget deficit is due to increased subsidies to gasoline consumers.
It’s time for a national debate on this Is it worth subsidizing 40 billion on gasoline when infant mortality due to malnutrition doubles?
Petro, who spent the weekend working with his ministers in La Guajira, proposed to Congress that the taxes on gasoline be separated from the indexation of gasoline prices “to reduce the impact on the consumer.” Plus, announced that the “price increase path” will start again for those who buy gasoline. By-products will not be touched.
“We are telling gas consumers that we will return to the price hike path and that the aim will be nothing more than reducing the irresponsibly accumulated deficit. We will not touch ACPM derivatives,” he said.
(Also: ‘There will be a dialogue with energy producers before the decision’: Minminas)
The President said Congress could advance the debate on the structure of fuel prices and their indexation to international oil prices.
“The mining ministry and DIAN should establish effective controls to ensure that the taxation and payment of royalties incurred by fossil fuel extraction companies are based on actual extraction and export quantities at international prices.”
After Petro’s announcement, former Finance Minister José Manuel Restrepo wrote to Petro: “It is very important to continue what we have shared with you and given you personally with the Medium Term Financial Framework. Here you see it. We paid 14.2 billion of the budget deficit without leaving and We left 5.5 billion of it in the budget and other payment sources,” he said.
Restrepo also ensured that ensuring the stability of fuel prices during the pandemic prevented inflation by five percentage points and incidentally avoided impacting the most vulnerable communities in the country. Similar processes were followed in many countries of the world.
“Knowing the financial cost, we have responsibly proposed and mobilized an orderly, gradual and careful response to this reality, in accordance with the medium-term fiscal framework, and reflected this in the budget.”
(Continue reading: ‘Some ministers need to stop being activists’: Roy Barreras)
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