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Petro Confirms Government's Intention To Reduce Fuel Subsidies

  • Over the weekend, President Petro reiterated comments made by his Finance Minister that the government will reduce fuel subsidies.
    • “We will return to the path of higher prices in fuel, and the objective will be nothing more than to reduce the irresponsibly accumulated deficit,” he wrote via twitter.
    • The government also plans to set more controls for effective taxation on fuel companies, and is considering levies on both extracted amounts and exports at international prices, Petro said.
  • Speaking on Friday, Finance minister Ocampo said that Colombia needs to carefully reduce fuel subsidies in order to lower the fiscal deficit without exacerbating its inflation problem.
  • The finance ministry estimate that subsidies on gasoline and diesel given through state-owned oil company Ecopetrol will cost public coffers about 2.5% of gross domestic product this year and 2.1% in 2023.
  • Additionally, it was indicated the government can complete its 2022 external financing plan exclusively with multilateral borrowing and financing from developed nation’s agencies, including from China.
    • “This year there has been no bond sales, and with the current conditions there will not be,” he said.

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