Colombia gas prices increase in July due to Iraq crisis

Posted on Jul 1 2014 - 5:13pm by Today News
(Photo: Banca de Negocios)

Colombia’s gasoline prices will increase due to changes in international fuel prices caused by the current crisis in Iraq. Colombia’s mining ministry announced that the state-imposed price increase would be $0.082 per gallon for July starting Tuesday.

At present, Colombia is a net exporter of oil, but imports refined fuel and complex petrochemicals, so the current turmoil has made fuel more expensive.

The country’s gasoline prices will increase with $0.082 per gallon in July due to the current crisis in Iraq, Ministry of Mines and Energy announced in a press release on Monday.

Colombia’s Ministry of Mines and Energy has the power to set fuel prices, and in Bogota this means that the price of gas will rise to $4.67 per gallon. The prices differ around the country and range from $3.16 in Pasto to 4.75 in Tunja.

Threat to Iraq refineries offsets fuel prices

In an interview with Caracol Radio, Colombia’s Mining Minister Amylkar Acosta said the adjustment in the gasoline prices are due to a moderate rise in oil prices in international markets caused by the armed conflict in Iraq.  The threat to refineries in Iraq and the high consumption of fuel during the summer Colombia made the Government take the decision, the minister told Caracol Radio.

Gasoline prices per gallon in US dollar June 30 2014

Venezuela: 0.05

United States: 3.71

Colombia: 4.76

United Kingdom: 8.42

Source: http://www.globalpetrolprices.com/gasoline_prices/

“This registered  rise in fuel is explained by the situation in Iraq where there is a very serious threat to the main refinery (…),” he added. 

The rebel offensive causing the crisis in Iraq is led by the jihadist organization Islamic State of Iraq and the Levant (ISIS), which fights to destabilize the government of Prime Minister Nouri Maliki. Iraqi forces have been engaged in heavy clashes with the rebels who have seized several key cities in the past week.

Colombia struggles with decline in production

Due to the Iraq crisis last week Colombia saw an increase of nearly 4% in crude oil prices which was good news for the country who struggles with a current decline on oil production.

MORE: Higher world oil prices from Iraq crisis offsetting Colombia’s export losses: govt

The mining ministry announced in 2013 that Colombia in 2020 will run out of oil reserves.

MORE: Colombia’s oil will run out by 2020 with no solution in sight

In Colombia the overall price of diesel fuel will almost remain constant in the month of July meaning that in Bogota the diesel fuel price will be at $ 4.51, according to the ministry.

Acosta underlined, that the government has established some controls to prevent abuses by distributors around the country.

Sources

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