Decrease in the sale of gasoline and diesel sets off alarms • La Nación

A comparison of the first four months of the year, between 2023 and 2024, has reflected a decrease in the sale of gasoline of 10% and diesel of 7% in Huila and Caquetá. Service station owners are desperate and do not rule out closures. A direct impact is expected on the taxes that mayors receive for fuel.

Johan Eduardo Rojas López

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The decrease in sales of 10% in gasoline and 7% in diesel, during the first four months of the year, has the sector worried. And it is no wonder, since the decrease was 1,946,968 gallons of gasoline and 833,371 gallons of diesel in Huila and Caquetá.

Although in April of the current year, sales ‘raised their head’ compared to the month of February and March, where the fall mostly occurred; The reality is that the numbers continue to decline. This was explained by Luz Mila Moyano Vargas, executive director of Combusur, who added that as is well known, the economy is currently declining in the country and that has also been reflected in the sales of gasoline and diesel retailers.

The month-to-month variation is as follows: during the current year, the month with the highest sales of gasoline gallons was January with 4,818,000, followed by April with 4,438,813, March with 4,370,278 and February with 4,216,386 . While last year, January also led sales with 5,325,416, followed by March with 4,984,524, April with 4,867,380 and again February ranked last with 4,613,125.

In the case of diesel, the behavior during this year was as follows: in April the highest sales were recorded with 2,917,152 gallons, followed by January with 2,822,721, February with 2,755,371 and March with 2,681,886. And during 2023, the variation showed that January also marked the highest sales with 3,102,623, followed by February with 3,051,952, March with 3,050,938 and finally April with 2,804,988.

The reason

“There is only one reason for this and it is the increase in the price of fuel, which in one year has increased around $6,500 per gallon of gasoline and that implies that the user of a vehicle decides not to use it with the same frequency as before and, Instead, look for other means of transportation. So people no longer consume the gasoline they used to consume. All this since we had the first increase because the problem for retail distributors is the Fuel Price Stabilization Fund, which was in the red, so we started to have monthly growth,” said Moyano Vargas.

And let us remember that, upon the arrival of Gustavo Petro to the National Government, in August 2022, Colombia had one of the lowest gasoline prices in the region, only above Venezuela and Bolivia. It was the product of a scheme that was created in 2007 with the idea of ​​helping to avoid abrupt price fluctuations, but which ended up being enormously deficient for the State.

Therefore, since July 2022, a constant increase began to be recorded that was maintained for several months. “The national government, since October 2022, launched the policy of reducing the value of the fuel subsidy in Colombia in order to reduce the deficit of the Fuel Price Stabilization Fund (FEPC),” the Minister said at that time. Ministry of Mines and Energy.

Tax impact

In the capital of Huila, for example, the price of gasoline is close to $16,000 per gallon, which has represented an increase of approximately $6,500 over the last year. “If the sale of gasoline and diesel is reduced, the item that enters the Mayor’s Office and the Government through taxes also decreases, because the price of fuel has many taxes, about 55% are taxes. That is to say, not only the income of the retail distributor is reduced, but also the tax part,” commented the executive director of Combusur.

However, despite this negative impact on the institutions, the truly and most affected are the retail distributors since, by increasing the price of fuel, they have to go into debt and the profit income, being so insufficient, does not allow them to remedy the debts.

“If the price of gasoline rises, to buy the same amount of gallons as last month, we need more working capital and, for that, we have to resort to credits or overdrafts, then we are increasingly in debt and decreasing our profitability margin. “added the union leader.

He then commented that the aim is to reduce the costs of a service station as much as possible, however, “obviously we are still concerned about the tax burden on fuel, which is quite large. Gasoline contributes about $1,400 per gallon surcharge to the municipalities and in the department the diesel surcharge is $390.”

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At risk of closing

After this worrying panorama, according to the union leader, some small service stations are thinking about benefiting from law 1116 of 2006 on financial insolvency because they do not have the resources to sustain themselves. Hence, “the idea is to look at how they are welcomed to be able to pay the debt and the economic commitments that they have with some suppliers, however, we have another serious problem and that is that we have signed contracts with the wholesale plants and we have to look at how we can untie those agreements with them; then very possibly what we have to do is hand over the real estate.”

Large companies such as: Terpel, Primax, Biomax, Plus and Telchac operate in Huila, and in general, all of them have been reduced, although not in the same proportion because there are some that have more stations and offer various services to retain customers.

Insecurity, another ‘headache’

According to the executive director of Combusur, the decrease in demand for both products occurs in all the municipalities of Huila and Caquetá. And now, they are subject to the behavior of the brent at an intentional level, in addition to the behavior of the dollar.

Added to this, insecurity has them in ‘check’, since criminal acts are occurring almost daily in these places. Hence, no information is provided on the various amounts. “Simply the first thing we as retail distributors should do is look at the issue of insolvency to see what we can do and know what resources we can count on to be able to continue working, but the problem is that if the decreases in sales continue to occur, everything will be more difficult. All this would lead to other social problems,” concluded Moyano Vargas.

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Repercussion

According to Óscar Rujana Quintero, president of the Huilense Society of Economists, to address the economic impact on the distribution of gasoline and diesel sales in the region, we must evaluate the first part of the chain, such as the increase in the price of gasoline. fuels, a point that has been discussed for many years because precisely it has an impact on the pockets of Colombians.

“Like everyone else, we are experiencing a slowdown. That is not an exclusively Colombian phenomenon. The country’s economic projections said that this year we should grow at 1%, today everything indicates that we can end 2024 between 1.8% and 2%. That is to say, the situation has been improving. Which does not mean that we are not experiencing this slowdown and that the objective of the Bank of the Republic, which was to cool the economy, was met,” said Rujana Quintero.

He maintained along these lines that, with respect to the zero hour to raise the ACPM, the discussion with the bank is how to do it so that inflation does not increase, because the problem that Colombia had and has is that in 2020 the price of the fuels.

“So, when inflation rose, it did not take into account the fuel factor and what was concluded was that both fuels could not be touched at the same time because we triggered inflation. This is how it started partially with gasoline. That is where the biggest gap in the Stabilization Fund is. But we will talk about diesel this year that we are paying at the international price,” the president continued.

Contradiction

Hence, it could be said that the increase in fuel prices is an absolutely unpopular measure, but fiscally necessary; something that is quite contradictory. However, the reduction in the sale of gasoline and diesel fuels also affects the family basket, employment and the development of the region.

On the other hand, “the fundamental chain impacts the distribution of gasoline at the maximum margin recognized in favor of the retail distributor in the cities where the regulated freedom regime applies, taking into account investments in infrastructure, operation and maintenance costs. , as well as administration and sales expenses. This margin is updated on February 10 of each year, based on the variation in the consumer price index of the immediately previous year certified by DANE, a situation that has affected and put at risk the service in the department and south of the country. since it is the final route of the pipeline,” he pointed out.