COLOMBIA · ECONOMY AND ENERGY
Key Facts
- Power Index Colombia ranks 6th of 14 in The Rio Times Latin America Power Index, with 51.9 points (October 2026 edition).
- What is happening Colombia’s government filed a bill on Thursday, 29 October that would raise the sales tax on gasoline from 5% to 19% and lift the carbon tax.
- Why it matters Fuel costs reach every Colombian household, and Ecopetrol, the state-controlled oil company listed in New York, would feel the tax and investment changes.
- The numbers Gasoline VAT would rise from 5% to 19%, diesel would stay outside VAT, and the carbon tax would climb gradually between 2027 and 2029.
- Who is who President Abelardo de la Espriella leads a conservative government, and Finance Minister Miguel Gómez Martínez presented the bill with Vice President José Manuel Restrepo.
- What to watch Committee votes in the lower house, a national strike called for Thursday, 19 November, and the end of the regular session on Wednesday, 16 December.
- What it means for you US holders of Colombian bonds or Ecopetrol shares should follow the bill, because it is not law and Congress can still change the fuel measures.
Colombia’s government wants to raise the sales tax on gasoline from 5% to 19% and lift its carbon tax. The plan is a bill in Congress, not yet law.
Colombia’s government has proposed a much higher sales tax on gasoline in its Rescue Law, which Congress has not yet passed. The bill, filed in the lower house on Thursday, 29 October, would also raise the carbon tax between 2027 and 2029.
For US readers, the fuel measures matter to Ecopetrol, the state-controlled oil company listed in New York, and to bondholders. The bill is the government’s plan to repair public finances, so its energy clauses face a hard test.
What the Bill Would Change for Fuel
The bill would raise the sales tax, called VAT, on gasoline from 5% to 19%, applied to the price the producer receives. The change comes with most of the bill’s VAT measures, which start in 2028.
Diesel would stay outside VAT, both at the producer and at service stations. Fuel ethanol would lose its VAT exemption, as would solar panels.
Carbon Tax and Big Investors
The carbon tax, a charge on the emissions from burning fuels, would rise gradually between 2027 and 2029. Companies certified as carbon neutral would stop paying it, but the benefit is capped at 25% of the tax.
A special regime called RUGE would target large new projects in mining, energy, oil and gas. It would fix income tax at 20% for projects starting in 2027 or 2028, and at 26% from 2029.
Dividends to foreign shareholders would face a single 8% rate, with tax rules fixed for 16 years. The minimum investment for energy, mining and infrastructure projects would be about 426 billion pesos (about US$132 million).
Where the Bill Stands
The bill must pass the lower house and the Senate. Under article 138 of Colombia’s constitution, the regular session of Congress ends on Wednesday, 16 December.
Fabio Arias, president of the CUT union confederation, has called a national strike for Thursday, 19 November against the bill. He says it is much more regressive, meaning harder on poorer households, than the tax plan of former President Iván Duque.
Colombia’s central bank, the Banco de la República, held its policy rate at 12.25% on Friday, 30 October. A higher fuel tax would feed into consumer prices, which the bank watches when it sets rates.
What It Means for US Readers
US holders of Colombian dollar bonds and Ecopetrol shares should watch the bill, which aims to steady public finances. The RUGE regime offers foreign oil and mining investors fixed tax rates for 16 years.
US travellers should check US Embassy alerts before the strike called for 19 November. Related Rio Times coverage includes Colombia’s US$13B Rescue Law Faces Congress and Colombia Union Leader Calls National Strike.
Our guide explains who runs Colombia’s economy. More is on the Colombia hub.
What Is Not Known
Pump-price effects are not known, and a business group’s summary, not the bill text, puts the gasoline change in 2028. The full bill text could not be opened, so the rates come from published summaries.
Yearly carbon tax rates come from that summary only, and Congress may change or drop any measure. Whether the government sought fast-track treatment is not confirmed.
Frequently Asked Questions
Is Colombia’s gasoline tax increase already law?
Not yet. It is a proposal in a bill filed on Thursday, 29 October, and Congress has not voted on it.
How much would the gasoline sales tax rise?
The bill would raise VAT on gasoline from 5% to 19% on the producer’s price. Most of the bill’s VAT changes start in 2028.
Would diesel also pay more tax?
Diesel would stay outside VAT at the producer and at service stations. The carbon tax, however, would rise gradually between 2027 and 2029.
Why does this matter to US investors?
Ecopetrol, listed in New York, and Colombian bonds depend on the state’s finances. The bill is the government’s plan to repair them.
Sources: Colombian Congress and Finance Ministry, Ley de Rescate Económico bill, filed 29 October 2026 and lower house (bill text not opened); Constitution of Colombia, article 138; Banco de la República, policy rate decision of 30 October 2026; Superfinanciera official exchange rate, 3,235.59 pesos per US$ on 4 November 2026; Colombian business association summary of the bill (RUGE and fuel clauses). Accessed 4 November 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief