Home » Gasoline and ACPM subsidies reached $39 billion in 2022

Gasoline and ACPM subsidies reached $39 billion in 2022

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Gasoline and ACPM subsidies reached $39 billion in 2022

The total cost of gasoline subsidies and the ACPM of the Fuel Price Stabilization Fund (FEPC) during 2022 was close to $39 billion (on average, $3.3 billion per month). According to recent information from the Ministry of Finance, $11 billion of the debt held by the Fund was canceled to the refiner and importer and, consequently, its fiscal deficit may be close to $28 billion, according to estimates by the Colombian Petroleum Association. (ACP).

Given the high fiscal cost of the subsidies, the Government began, in October 2022, to apply monthly increases of $200 per gallon to close the gap with international prices, which could occur in 2024 or earlier, depending on fluctuations. of the foreign price and the exchange rate. The diesel subsidy would be maintained in 2023.

For their part, biofuel prices closed at $13,048 per gallon for ethanol and $20,309 per gallon for biodiesel. In the case of ethanol, the price did not fully reflect the opportunity costs of the domestic producer or the importer.

It is estimated that the collection of the central government and territorial entities for taxes on fuels caused during 2022 was $7.5 trillion (17% higher than the value in 2021): $4 trillion for national taxes (VAT, national gasoline tax and diesel and carbon tax) and $3.5 billion for departments and municipalities for the surcharge on gasoline and the ACPM.

By 2023, taking into account the projected growth in demand and the updating of tax rates, it is expected that the collection will reach levels close to $9 trillion.

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Investments

On the other hand, according to the ACP, an estimated $1.3 trillion in refining, in major maintenance at the two refineries and the entry into operation of the integration project of the Reficar crude units. In addition, $0.6 trillion in the development of polyduct expansion projects.

On the other hand, $0.9 billion was invested by wholesale distributors in: adaptation of supply plants to the new technical regulations, some projects to expand storage capacity and connection to the polyduct, and in the network of service stations. There were also investments of $0.8 trillion directly by retail distributors, in the implementation of the technical regulation and in energy diversification projects.

In total, in the past years, the agents of the fuel distribution chain made investments close to $3.7 trillion.

For 2023, similarly, investments of $3.3 trillion are scheduled: $1.3 trillion in major maintenance at refineries, $0.9 trillion in transportation activity, especially in the continuation of the 2022-2024 investment program in priority projects of the polyduct system (Galán-Bucaramanga, Cartagena-Baranoa, Manizales-Pereira-Cartago and Tocancipá).

In addition, $0.5 billion from wholesale distributors; 31% in adaptation and expansion of supply plants, 50% in the maintenance of the network of stations, 1% in environmental and social investment, 4% in self-generation projects with renewable sources and hydrogen research, 14% in renovations and technological developments and $0.6 trillion for retail distribution, which include projects aimed at transforming stations into multi-energy supply points.

According to the ACP, the previous levels of investment show the intention of the agents to continue betting on the country with their efforts to improve the reliability and quality of the fuel distribution service to consumers and, at the same time, the interest of advance in energy diversification. To support these country bets, it will be key to have clear regulatory signals that ensure the long-term economic viability of the different projects.

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Employment

In 2022, the activities of the liquid fuels distribution chain (refining, biofuels production, transportation by pipeline, and wholesale and retail distribution) generated nearly 150,000 direct and 120,000 indirect jobs. They are expected to increase by 4% by 2023.

In other words, behind the guarantee of fuel supply to Colombians throughout the entire national territory is the effort and work of 270,000 people”.

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