Energy and Natural Gas Subsidies Controversy

Energy, Regulation & Policy    Sep 21, 2018 4:26 PM

Colombia has discussed the convenience and future of natural gas and energy subsidies for low-income families. Senator Mauricio Gómez recently created a controversy about the future of these subsidies.

According to Blu Radio, Gómez said the government will eliminate energy and natural gas subsidies for low-income families.

He said that Alberto Carrasquilla, MinHacienda, was the person who informed him of this decision in an event of the General Budget.

Gómez commented that the government plans to dismantle these subsidies in 2020, according to Carrasquilla’s statements. The senator criticized the lack of synergy between MinHacienda and President Iván Duque on key issues for the country.

“I do not understand how President Duque is on one side and the Minister is on the other. I see a minister very close to the economic members and he does not think about the people,” said Gómez.

The Senator said that the elimination of subsidies would increase natural gas and energy rates by up to 76%, seriously affecting these families.

However, the government denied Gomez’s statements through the Ministry of Mines and Energy (MinMinas), according to El Tiempo.

María Fernanda Suárez, MinMinas, said the government will not eliminate energy subsidies for low-income families, as authorities pledged to maintain these subsidies in 2019.

“The first thing I want to say to all Colombians is that they can be absolutely calm. Electricity subsidies are currently available in strata three, two and one, and these subsidies are going to be maintained,” Suárez said.

Suárez acknowledged that there is a deficit of CoP$2.5T, but MinHacienda and MinMinas are working on a plan to solve this situation.

Bottom-Line: Suárez clarified that the commitment is to maintain the subsidies in 2019, but she did not say anything about 2020 onwards. It seems like this discussion will continue in the coming years.

The fiscal gap is huge at present, but some political sectors want to extend natural gas subsidies to the whole country …

 

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