Energy Associations talk subsidies

Energy    Sep 11, 2019 3:41 PM

Energy generation and distribution Associations expressed their concern about the resources allocated to energy and gas subsidies.

The Colombian Association of Electric Power Generators (Acolgén), the National Association of Energy Generating Companies (Andeg) and the Natural Gas Association (Naturgas), among others, sent a letter to President Duque, saying that energy subsidies for low income families are too low.

According to information from El Colombiano, the Associations said that there will be a CoP$793B deficit for energy service, and a CoP$230B deficit for natural gas service in the coming years, for a total of CoP$1T.

The experts added that the country would need CoP$3.7T in subsidies during 2019 and 2020, to cover lower energy and gas tariffs coming from strata 1, 2 and 3.

“However, we note with concern that the General Budget (PGN) for 2020 proposes to allocate CoP$742B for these resources , including subsidies for non-interconnected areas and for companies that are not affiliated with our associations,” says part of the letter that the Associations sent to President Duque.

Minister of Mines and Energy (MinEnergia), María Fernanda Suárez, said that the Associations’ concerns are being studied by the Congress and the Ministry of Finance (MinHacienda), arguing that the government’s priority is to assure the wellbeing of vulnerable families.

President Duque has not commented on the matter.

Bottom-line: The government cannot subsidize everyone, so it needs to prioritize its spending.

That being said, a subsidy to help the firewood-to-alternatives transition in Colombia’s rural areas is a must to boost the country’s energy transition process and to reduce air pollution levels.

The government must look into the situation now, before more damage is done to Colombians.

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