The Anif Center for Economic Studies this week raised sharp questions about the national government’s idea of providing a subsidy to taxi drivers in the country to ease the burden caused by the current rise in gasoline prices. The gallon of this fuel costs over 13,000 pesos, while the bills, according to Finance Minister Ricardo Bonilla, speak of 16,000 pesos.
Although no further details are currently known about how the system that defines this aid to “Amarillitos” will work, some predictions are already known about how much this could cost Colombians in the rest of the year. They reveal numbers that are not encouraging at all.
According to Anif, “According to government data, 40,000 taxis use gas as fuel, which means that 193,947 run on gasoline.” Taking this number as a reference, assuming that the beneficiaries actually receive compensation of US$3,000 per tank of fuel (day). dollars, if a taxi operates continuously for 30 days, the beneficiary would be compensated at a monthly value of $90,000.”
Therefore, this think tank claims that “this would mean that the country would have to pay out more than $17.5 billion for the month of September.” For the month of October, this figure would now be higher, as the subsidy coincides with rising prices for regular gasoline increases. Assuming the price per gallon increases by $600 between September and October, a monthly fluctuation of 4.3% is expected.”
The result in October would be that the cost of this subsidy would rise to 18.2 billion and for November and December it would continue to rise, taking into account the petrol increases taking place, until it reached a total, with November and December added together. of 73.4 billion pesos.
“This would initially mean that the reduction in the Fepc deficit, estimated at $18.9 billion in 2023, would be $74.3 billion lower. A figure that may not be so scandalous, but represents a setback for the efforts being made to reduce the deficit,” warns Anif in his analysis.
Gasoline in Colombia
Another point that attracts attention in this report is the one that warns that “once a subsidy is introduced, it is very difficult to remove it later”, making it clear that this is not just a 2023 issue would be, but also could be extended for further years, which affected the state finances and made it increasingly difficult to close the gap that had opened for years in the Fpec.
“Assuming that the price of a gallon remains constant at the value observed at the end of 2023 and no other factors change the amount of the subsidy, this would mean that beneficiaries would receive a monthly payout until 2024,” for about 101,000 pesos. This would then equate to a cumulative annual total of $237,000 million derived from Fepc resources,” Anif said.
The Center for Economic Studies concluded: “The above means that 4.4% of the $5.4 billion that the MFMP estimates as a FEPC surplus as a result of the increase in gasoline prices in 2024 would be lost .”