Government Petro would be willing to pay all its debt to Ecopetrol

The Colombian Ministry of Finance plans to pay in full the debt of 5.8 billion dollars that it has with the state oil company Ecopetrol SAreported the Bloomberg agency, citing a person with direct knowledge of the matter.

(The agreements that Ecopetrol reached with the USO and six other unions).

The debt stems from the government’s decision to subsidize fuel prices to curb inflation as the economy recovered from the pandemic.

The current government of President Gustavo Petro had already agreed to pay 18 trillion pesos (about US$4 billion) of debt in its 2023 budget.

However, the ministry would plan to go further and pay the full amount due for the 2022 subsidies, the person said, who asked not to be identified as the discussions are private.

The new proposals will speed up the process, the person said, without giving a date.

The original plan by the finance ministry was for Ecopetrol to withhold the dividend it would have paid to the government, which has an 88.5% stake in the company.

(Ecopetrol will receive an international loan for up to US$400 million).

However, the government would need to pass a bill to make it so, and congressmen are running out of time.

The ordinary sessions of Congress end on June 20 and legislators are dedicated to debating important bills to reform the pension and health systems, and the labor market.

(Ecopetrol profits fell 13.9% in the first quarter of 2023).

The Government has been gradually eliminating subsidies in recent months. Even so, this year it will accumulate a new debt with the company of some 22 billion pesos, according to the commission that oversees the implementation of the fiscal rule.

Ecopetrol declined to comment and the finance ministry did not immediately respond to requests for comment.

Bloomberg