Recently, House Representative Katherine Miranda called for highlighting the importance of paying the deficit of the Fuel Price Stabilization Fund (FEPC).
The representative for the Green Party pointed out that it is essential that the Government maintain the payment of $18 billion to the FEPC, just as the former Minister of Finance José Antonio Ocampo had projected, since otherwise it could have a negative effect on the financial health of Ecopetrol and on the Fiscal Rule.
(See: ‘The hardest months of my life’: Ocampo on his time at Minhacienda).
This warning was supported by the former head of the Treasury portfolio, who also added that the 2022 deficit is greater than $30 billion.
Support for the President of the 3rd Committee of the Chamber. The Fepc deficit was a terrible inheritance from Duque, but the Petro Government has to pay for it, out of respect for the Fiscal Rule and the health of Ecopetrol’s finances. Furthermore, the 2022 deficit is larger: close to $30 trillion. https://t.co/oLTWRlaxFI
— Jose Antonio Ocampo (@JoseA_Ocampo) May 24, 2023
In interview with Snail Radio, The former Minister of Finance spoke about the risks that failure to pay this debt could mean for Ecopetrolsince it would cause the oil company to enter a situation of illiquidity.
“From the point of view of Ecopetrol’s finances, what happens is that all the subsidy for fuel consumption, which is given through the FEPC, is incurred by the state company and the Government pays it with a year’s lag; that is, , this year we paid the 2022 deficit. It is absolutely essential to pay it because otherwise it would find itself in a situation of illiquidity”he explained.
(See: Petro Government would be willing to pay all its debt to Ecopetrol).
To better assess the situation, Ocampo made reference to the fact that during December 2022, when he was at the head of the Minhacienda, there was a liquidity problem with the oil company and that to avoid it, an injection of $4 billion was made as payment for part of that deficit from the previous year.
The former minister also emphasized that, although he is clear that the Government will comply with this disbursement, it is not yet clear how the financial health of the state oil company is to be guaranteed.
“I understand that the Government wants to pay, but the mechanism that had been agreed was a crossing of accounts between the dividends that the Nation received on behalf of Ecopetrol and a substantial part of that deficit is not in the Government’s accounts. The important thing is know how to payhe pointed.
(See: The reasons why gasoline in Colombia does not stop rising).
Ecopetrol.
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The Fuel Price Stabilization Fund was created more than 15 years ago with the objective of shielding national fuel prices, and the pocket of Colombians, from international shocks. But that compensation continued to be subsidized during the pandemic, despite the increase in oil prices nationwide, and therefore gasoline.
(See: The ACPM represents about 60% of the deficit of the Fuel Fund).
To clean up this gap in finances, since October 2022 the Government implemented the policy of reducing the value of the fuel subsidy, and the price of gasoline began to increase.
At the end of 2022, the deficit generated by the Fepc account was around $36 billion. However, and according to the current Minhacienda, Ricardo Bonilla, to date, this has been reduced to $32 billion.
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