Colombia will raise gasoline prices by 375 pesos ($0.10) and diesel by 81 pesos this month as soaring oil costs pressure its widening budget deficit. The energy regulator CREG confirmed the hikes, reversing temporary February-March cuts that followed a record minimum wage increase. Energy Minister Edwin Palma stated prices will rise gradually to align with international markets, acknowledging the fiscal burden of subsidies.

The government’s U-turn comes as Latin American nations, including Chile, scale back fuel subsidies amid economic strain. Chile’s recent 50%+ diesel hike triggered panic buying, highlighting regional challenges. Colombia’s diesel prices had remained stable due to trucker opposition, but a draft decree proposes ending subsidies for non-essential vehicles, signaling broader reforms.

President Gustavo Petro’s 2022 plan to phase out fuel subsidies faced resistance, particularly from truckers whose protests disrupt supply chains. The current strategy balances inflation control with social stability, as higher prices risk public backlash. Analysts warn the move could slow economic recovery, with budget deficit concerns intensifying.

Colombia gasoline prices reflect a critical test for Petro’s economic policies, blending austerity with populist measures. As oil costs rise, the government walks a tightrope between fiscal responsibility and maintaining public support.