President Gustavo Petro has ordered an immediate reduction in gasoline prices across Colombia, reversing a previous policy that had kept fuel costs elevated. The move targets a 15% decrease in pump prices effective January 17, 2026.
- 15% reduction in gasoline prices effective January 17, 2026
- Average cut of COP 480 per liter across Colombia
- COP 1.4 trillion redirected from Ecopetrol’s profit distribution
- Ecopetrol’s annual profit share reduced by 12% for six months
- Fuel prices previously reached COP 4,780 per liter in December 2025
- Expected CPI impact: 0.3 percentage point reduction in Q1 2026
President Gustavo Petro announced a direct intervention in Colombia’s fuel market, directing the national energy regulator to reduce gasoline prices by 15% starting January 17, 2026. This marks a significant reversal from earlier government policy that had capped subsidies and maintained higher retail pricing to support state-owned energy firm Ecopetrol’s financial stability. The price cut will affect all major fuel types, including gasoline (95 octane), diesel, and kerosene, with an average reduction of COP 480 per liter across the country. The decision follows growing public discontent over high fuel costs, which contributed to widespread protests in late 2025. According to government data, average gasoline prices had reached COP 4,780 per liter in December 2025, making Colombia one of the most expensive countries for fuel in Latin America. The new measure aims to stabilize household budgets and reduce inflationary pressure, with the Ministry of Finance estimating the price drop could lower the consumer price index by 0.3 percentage points in the first quarter of 2026. The reduction will be financed through a temporary adjustment in Ecopetrol’s revenue-sharing agreement with the state, which will see the company receive a 12% decrease in its annual profit distribution for the next six months. This adjustment is expected to total approximately COP 1.4 trillion in redirected funds. The government also pledged to maintain fuel supply stability, with the Ministry of Transport deploying emergency reserves to prevent shortages. Financial markets reacted cautiously. The Colombian peso (COP) strengthened by 1.2% against the U.S. dollar in early trading, while the IGBC stock index dipped 0.6% as investors assessed the fiscal implications. Energy sector stocks, particularly Ecopetrol (ECP), saw a 3.1% decline in morning sessions. Analysts note the move may strain public finances over the medium term but could bolster Petro’s approval ratings ahead of local elections in 2027.