Colombian Truckers Protest Diesel Price Hike Amid Fuel Subsidy Debate

Truckers in Colombia protested against a recent diesel price hike, blocking highways and causing significant disruptions. The government under President Gustavo Petro plans to phase out diesel subsidies to address budget deficits and redirect funds towards education and health. The move has sparked nationwide protests and concerns over the economic impact on transport businesses.

Thousands of Colombians had to resort to walking to work on Tuesday as truckers in major cities blocked highways to protest a recent diesel fuel price hike.

Truckers unions warned that the government's plans to eliminate diesel fuel subsidies could push their businesses into bankruptcy. Left-wing President Gustavo Petro's administration argues that phasing out subsidies is necessary to combat a growing budget deficit and redirect funds towards education and health.

On Saturday, the government raised the price of diesel fuel to approximately USD 2.90 per gallon, up 50 cents from the previous rate, after multiple discussions with truckers' unions. Nationwide protests intensified on Tuesday with roadblocks in Bogotá, Medellin, and Cali, leading to reduced food supplies in wholesale markets.

President Petro emphasized on social media platform X that he would not permit truckers' unions to "block" the country, stating that removing fuel subsidies is essential to "reduce public debt" and "finance the health and education of Colombians." Diesel subsidies have been a longstanding practice in Colombia, with prior administrations maintaining them to avoid protests and food price inflation.

The Finance Ministry reveals that diesel fuel subsidies cost the government around USD 240 million monthly, distributed to the state oil company Ecopetrol. Some economists suggest Ecopetrol sell diesel at lower rates domestically to mitigate impact, but this would affect the company's margins and its shareholders.

The government plans to phase out subsidies in three stages to help transport companies adjust. Officials remain open to dialogues with truckers' unions for compensation strategies.

This subsidy debate coincides with the Finance Ministry's upcoming tax reform proposal aimed at raising USD 3 billion next year through increased wealth and personal income taxes, plus higher sales taxes on hybrid cars and online betting.

During President Petro's first two years, the annual government budget has surged by about 30%, reflecting enhanced social welfare spending and an expanded state employee workforce.

(With inputs from agencies.)