& Tobago

Very usefull links


News links




Dow Jones

Oil price



Views and News




Ecopetrol studying price hedge, fuel tax cut



By Argus

Petroleumworld 05 14 2019

Colombia's state-controlled Ecopetrol is considering a number of hedging options to manage oil price risk and could engage the market later this year.

Ecopetrol recently updated its hedging policy in conjunction with the board of directors.

"We have a framework to engage if we see a business case for it," chief financial officer Jaime Caballero told analysts, adding that the focus is on risk management, not speculation or profit. "We are looking at a number of options."

As an integrated oil company, Ecopetrol already implements natural hedges, Caballero said.

Ecopetrol averaged $56.20/bl for its basket of heavy crude in the first quarter of 2019, down by 6.2pc from a year earlier, the company said in its earnings report late yesterday.

Ecopetrol chief executive Felipe Bayon said the company is studying the impact of a government plan to cut a value-added tax on gasoline and diesel to 5pc from 19pc. The measure is one of 349 articles in the 2018-22 National Development Plan (PND).

"We are waiting for presidential sanction and regulations to see what this implies for Ecopetrol's different business segments," Bayon said.

But the initial analysis could indirectly hurt the company, which pays the same 19pc VAT on purchases and sales.

"The implementation of the article could absorb a good part of the benefits of the financing law," said Caballero, referring to the tax breaks that Ecopetrol expects to receive under the government's separate fiscal reform package.

Julio Cesar Vera, president of Colombian consultancy Valjer Energia and former president of oil engineers' association Acipet, told Argus the fuel tax cut is equivalent to around 700 pesos ($0.21)/USG. But the article would transfer the differential to the producer, rather than the consumer, and scrap a fuel price stabilization fund which has a Ps14bn deficit.

"Lawsuits are coming. This article has defects in substance and process," he told Argus .

Alvaro Younes, president of oil distributors' association Fendispetrol, said the article is incoherent and does not alleviate the price burden for consumers. He urges the government to take a comprehensive approach and address the "capricious" manner in which the mines and energy ministry currently issues monthly fuel prices.

The finance ministry and the mines and energy ministry did not respond to requests for comment.


We invite you to join us as a sponsor.

Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.



Story from Argus Media. 05 07 2019


Hit your target - Advertise with us

PW 300.000 plus request per week

Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions as the source.

Other stories you have to get authorization by its authors. Internet web links to are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to:

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1




Editor & Publisher: Elio Ohep/
Contact Email:

CopyRight © 1999-2019, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2019, Petroleumworld   / Elio Ohep - All rights reserved



This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.