Not just food: the sectors that would suffer from the rise in gasoline

Recently, President Gustavo Petro announced increases in the price of gasoline to combat the deficit that exists in the Fuel Price Stabilization Fund.

(Read: Why diesel generates more deficit than regular gasoline).

Immediately afterwards, the Minister of Finance, José Antonio Ocampo, announced that starting in October, the gallon of gasoline would increase 200 pesos per month until the end of the year.

Now, different economic sectors have shown their concern, since the measure would have an impact on some key items of the national economy. For Sergio Cabrales, an industrial engineer with experience in hydrocarbons, the immediate effect would be on inflation.

“The most worrying is food inflation that can reach more than 20%. This has a much more profound effect on the neediest classes because most of their salary goes to services, rent and food. The effect it has on the lower strata is much higher“, Explain.

According to the Ministry of Finance, for every 1,000 pesos that the price of fuel increases, inflation would rise 0.65%. “It doesn’t sound very high, but if one raises 5,000 or 6,000 pesos, this means that inflation is going to double. We are already suffering from double-digit inflation and it is very painful because everything becomes more expensive, but prices do not rise. salaries,” points out Cabrales.

Now, the expert also talks about affectations in other areas like the services. For example, that of electricity that is linked to the IPP and the CPI. “It is also believed that poverty can increase because of these inflation problems. The collateral damage is very high,” she says.

(Also: Deficit and inflation, the effects of raising gasoline prices).

For this reason, he emphasizes that although the rise is necessary, it is time to go increasing progressively so that the blow is not so forceful.

On the other hand, in the long term, Cabrales points out that it can make us uncompetitive at the international level since the production of any product at the national level becomes more expensive. This, in short, causes the investment to decrease.

(Read: Why there is a deficit in the fund that stabilizes the price of gasoline).

Now, he makes the rescue that the rise is key: “If it doesn’t go up, the deficit grows and that’s a time bomb. Having a deficit of 38 billion for the nation is absurd because who is going to pay for it. We would need another tax form“.

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