Bancolombia Projects 14-Trillion-Peso Deficit in Colombia's Fuel Fund

On July 15, financial group Bancolombia projected that Colombia's Fuel Price Stabilization Fund (FEPC) deficit will climb to 14 trillion pesos in 2026, more than double the 6 trillion estimated by the Colombian Ministry of Finance, if the incoming government of Abelardo De la Espriella does not resume monthly domestic price adjustments.

The FEPC accumulated a cumulative deficit of 36 trillion pesos between 2021 and 2023, when international crude prices surged and the government kept domestic prices frozen. The outgoing government of Gustavo Petro applied mixed gasoline price adjustments in 2026: it raised the price by 90 pesos per gallon in January, reduced it by 500 pesos in February and March, and resumed increases of 375 and 400 pesos in April and May. While those increases have already narrowed the gap for gasoline, the implicit subsidy for ACPM (Colombian diesel) remains untouched and is now the primary source of fiscal pressure, according to analysis from Investigaciones Bancolombia. The projection assumes an average Brent price of 81 dollars per barrel and an exchange rate of 3,615 pesos per dollar.

Bancolombia estimates that resuming monthly gasoline price increases of 500 pesos per gallon starting in August, when De la Espriella takes office, would reduce the deficit by at least 2 trillion pesos compared to a no-adjustment scenario. The national average price of regular gasoline stands at 15,848 pesos per gallon. Each 100-peso-per-gallon increase adds approximately 0.02 percentage points to monthly inflation, but the cost of not adjusting falls directly on the national budget. The Colombian case mirrors the same dilemma Mexico faces with its 27-pesos-per-liter diesel price cap: containing inflation through subsidies postpones the fiscal bill, it does not cancel it.

The outgoing government's Medium-Term Fiscal Framework puts the deficit at just 6 trillion pesos, a figure Bancolombia considers unsustainable under current market conditions. The decision to adjust or not adjust prices in August will be the incoming Colombian government's first fiscal signal.

This article was written with artificial intelligence assistance based on verified sources and reviewed by a human editor before publication.