BOGOTÁ, Colombia (AP) — Thousands of Colombians were forced to walk to work on Tuesday, as truckers in major cities blocked highways to protest a recent increase in the price of diesel fuel.
Truckers unions have said that plans by the government to eliminate diesel fuel subsidies would put their businesses on the edge of bankruptcy, while the administration of left-wing President Gustavo Petro argues it must phase out subsidies to cut a growing budget deficit and direct more funds to education and health.
On Saturday, the government raised the price of diesel fuel to around $2.90 per gallon, a 50-cent increase from the previous price, following numerous meetings with truckers unions.
In response, the unions have been holding protests around the country, which intensified on Tuesday, with roadblocks in the cities of Bogotá, Medellin and Cali, that have diminished the amount of food arriving at wholesale markets.
Petro wrote on social media platform X that he would not let truckers unions “block” the country. The former activist, who has led numerous protests throughout his career, wrote Tuesday that fuel subsidies had to be removed in order to “reduce public debt” and “finance the health and education of Colombians.”
Subsidies for diesel fuel have been implemented in Colombia for decades, and previous governments have kept them in place, fearing that a removal could lead to massive protests and increases in food prices.
According to Colombia’s Finance Ministry, diesel fuel subsidies cost the Colombian government around $240 million each month paid out to the state oil company Ecopetrol.
Some economists in Colombia have suggested that Ecopetrol sell its diesel fuel for a cheaper price within Colombia, but that would cut deeply into the company’s margins, and affect shareholders of Ecopetrol, which is also listed on the New York Stock Exchange.
The government says it is planning to remove diesel fuel subsidies in three stages to enable transport companies to plan for the increase in prices. Officials in Colombia have said, however, that they are willing to meet with truckers unions to discuss ways in which they can be compensated for their higher operational costs.
The debate over fuel subsidies comes as the Finance Ministry gets ready to present a tax reform plan to Colombia’s congress that seeks to raise government revenues by $3 billion next year.
Officials in Colombia have said they are planning to increase wealth taxes and taxes on personal income that does not come from wages. The finance ministry has also said it plans to increase sales taxes on hybrid cars and online betting.
During the first two years of Petro’s administration, the government’s annual budget has increased by around 30%, as Petro tries to boost spending on social welfare programs, and increases the number of state employees.
Manuel Rueda, The Associated Press