Gas Stations In Northeastern Colombia Shut Down Over Dispute With Government Over Fuel Subsidies

Retail gas stations and wholesale distributors in La Guajira, Colombia’s Atlantic coastal department bordering Venezuela, have closed in protest of the national government’s subsidized gasoline quotas established by MinMinas, Colombia’s ministry of Mines & Energy.

La Guajira, one of Colombia’s most poverty-stricken areas is affected by a dangerous, illegal influx of contraband fuel smuggled in from Venezuela and controlled by local mafias and armed insurgent groups. The fuel, carried in any plastic jugs available, including used soda bottles, is then sold to local consumers. Often there are deadly accidents involving the combustible, and violent conflicts between smugglers.

Below photo: Contraband gasoline in the border town of Maicao, smuggled into Colombia from Venezuela.

To combat this, the Colombian government provides a subsidy to reduce local consumer fuel prices in La Guajira enough to counteract the demand for contraband gasoline. Gasoline retailers are protesting and have shut their stations saying that the government has only increased the subsidized quota by 7.6% in the past six years, from 2,333,000 gallons in 2014 to 2,526,000 gallons this year. These numbers disagree with those issued by MinMinas, which states that quotas from December go from 1,748,461 gallons to 2,526,772 gallons, a total increase of 45% (778,311 gallons).

The stoppage has been organized by the “Dispeguajira Association of Service Stations” trade group. According to a written response to Finance Colombia queries, all 195 retail outlets in La Guajira, which includes the towns of Riohacha and Maicao, and the gasoline wholesales of Ayatawacoop, Discowacoop, and PYB. All the operators are local, and national operators such as Texaco and Terpel have no retail presence in the area.

In December, MinMinas instituted a new methodology for determining subsidized fuel quotas. “The new methodology responds to the needs of the inhabitants of the municipalities and departments of the border areas and is another example of the National Government’s commitment to continue promoting productivity and employment with legality and equity in the regions,” he said. the Minister of Mines and Energy, María Fernanda Suárez.

©Loren Moss

Gas station photos courtesy Dispeguajira
Contraband photo credit: Loren Moss