This Tuesday the Minister of Mines and Energy, Irene Vélez, presented the report on the execution of the portfolio budget as well as the proposal for 2023, with adjustments to those initially registered in the General Budget of the Nation (PGN). Vélez highlighted that there are some budget shortfalls for this year that would be charged to the public debt and that would be additionally incorporated into the 2023 PGN. These correspond to resources that would be used to pay energy and network subsidies that add up to more than $1.7 billion.
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However, the Minister presented an update on the request for resources for the coming year. Originally, in May, $7.01 billion was requested for the Ministry of Mines and Energy and $3.69 billion was assigned to the project, which represents a 47.4% drop in the amount.
In this sense, Vélez presented the new proposal to update the PGNwhose request contemplates an allocation of $6.25 trillion, which would amount to $8.89 trillion counting what would be transferred to the entities attached to the portfolio (Upme, Creg, ANH, ANM, among others).
Of these $6.25 billion presented by the Minister, one of the data that stands out is that 82.2% of the total amount would be dedicated to the payment of subsidies (which is included in the investment chapter). For the payment of these subsidies for water and gas services, the Ministry requested $5.14 billion.
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Today the filing contemplates that although the subsidies would be the main amount, it would represent 48.2% of the assigned amount. The total that is budgeted in the project is $2.94 billion, with which the increase would be both in the amount and in the participation of the Ministry’s total money. The shortfall ($2.5 trillion) in this concept represents about 48.9% of the updated total that the portfolio is requesting. An additional $2.56 billion is also requested in the operating concept.
The disaggregation presented before the Fifth Committee of the House of Representatives shows that one of the largest deficits in terms of appropriation is found in electricity subsidies, in which an additional $1.94 billion is required, almost double what was established. In the case of gas, the shortfall is $577,000 million. “The bulk of the deficit is in gas and energy subsidies. That total deficit is in the order of $2.5 billion,” said Vélez.
It should be remembered that there are currently 13.3 million households in strata 1, 2 and 3 that benefit from aid in the energy service and 6.7 million families in strata 1 and 2 do so in the case of gas.
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During the event, the Minister assured that “with what we have as a settled project, we would have to cover only 4 months of energy subsidies, there are only 6 months in the case of gas. Namely, the deficit would be more than half of the year and that is what we have to manage in this new proposal”.
Juan Alberto Londoño, former Deputy Minister of Finance, stressed that historically this is one of the most important items in this portfolio. He explained that it is one of the policies that have helped people with fewer resources maintain their living conditions.
However, Londoño points out that in view of the increases that have been seen in recent days with respect to the price of these public services, a greater fiscal effort is required to cover these subsidies. And he points out that these additional budgetary needs justify the tax reform that the government of Gustavo Petro is currently presenting.
However, the expert points out that the PGN should first be approved to meet the resource needs of all entities and thus promote the reform with this in mind.
And he adds that these payment programs are relevant for low-income Colombians who require this support. For this reason, it is likely that Congress will approve a higher amount for this portfolio and for the payment of subsidies to these public services.
Daniela Morales Soler
