The Trucker’s Strike is Just the Beginning
Colombia has a serious problem, and it’s costing the government about $240 million every single month.
The culprit? Diesel subsidies.
Let’s break it down.
In early September 2024, the Colombian government decided to hike diesel prices by 50 cents per gallon.
For truckers already dealing with razor-thin margins, this price jump was a financial gut punch. Many feared bankruptcy as operational costs soared overnight.
And so, the protests began.
Truckers across the country went on strike. Roads were blocked. Cities like Bogotá, Medellín, and Cali were gridlocked. Supplies of essential goods started drying up. The price hikes hit everyone, and the ripple effects were felt across the entire economy.
The root of the issue lies in Colombia’s long-standing diesel subsidies. For years, the government kept diesel prices low to help truckers and keep transportation costs down. But this came at a cost—about $240 million a month, or roughly $3.5 billion a year. That’s money the government doesn’t have.
Fuel subsidies have become a heavy weight on the country’s finances. In 2023 alone, $7.25 billion of the national budget had to be allocated to cover these subsidies. This is almost double what the government earned from its much-talked-about 2023 tax reform. Let that sink in for a moment.
President Gustavo Petro’s administration defended the subsidy cuts, saying they were necessary to fix the country’s budget and redirect funds to education, health, and public debt reduction. On paper, it sounds like a responsible fiscal move. But the truckers? They’re not buying it. They argue that the government is forcing them to bear the brunt of the burden while not offering a clear alternative to keep their businesses afloat.
The five-day trucker strike paralyzed much of the country. Roads were impassable, and the supply chain—especially in the food sector—was severely disrupted. Prices rose as goods couldn’t get to market. The dairy, poultry, and pork industries were hit hardest, and concerns about inflation started bubbling up.
Eventually, the government and the truckers reached a compromise. Instead of the steep 45-cent-per-gallon hike, the increase will now be phased in more gradually, with smaller increases over time. Crisis averted, for now.
But here’s the real takeaway: this is a band-aid on a much bigger problem.
The government still faces the challenge of how to deal with the enormous financial strain of fuel subsidies, and the truckers are still feeling squeezed. The next confrontation over this issue is probably just around the corner.
Colombia’s $240 million-a-month diesel problem is a ticking time bomb for the government’s finances, and as the situation evolves, it’s clear that this won’t be the last time these tensions flare up.
Stay tuned—this story is far from over.