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Colombia Government to Pay $2 Bln to Ecopetrol to Support Fuel Fund

BOGOTA, Oct 2 (Reuters) – Colombia will pay majority state-owned oil company Ecopetrol (ECO.CN) more than 8 trillion pesos (about $2 billion) for its cash contribution to the Fuel Price Stabilization Fund (FEPC) corresponding to the third quarter of 2022, according to a document seen by Reuters.

The FEPC was created in 2007 to mitigate the impact of international fuel price fluctuations in Colombia’s domestic market.

The resolution – signed by Finance Minister Ricardo Bonilla – orders the payment be made to Ecopetrol, which often receives large sums of money from the government for its refining and fuel import operations.

Recently, the FEPC subsidized gasoline and diesel prices for several months as it mitigated inflationary pressures on the price of oil and its derivative products.

Following the government’s payment to Ecopetrol, the FEPC deficit as of the end of July 2023 will stand at about 22 trillion pesos ($5.43 billion).

The government of leftist President Gustavo Petro has gradually increased gasoline prices in a bid to tackle the deficit, though it has kept diesel prices stable.

The government is looking to hike gasoline prices to international levels, which could see a gallon of fuel hit 16,000 pesos (about $4) in the coming months.

($1 = 4,053.76 Colombian pesos)

Source : reuters