Colombia's state-controlled Ecopetrol increased domestic sales of refined products in 2019, reflecting both reduced availability of contraband supply along the Venezuela border and Colombian economic growth.
The volume increase was especially pronounced in the fourth quarter, when Ecopetrol's products sales in the Colombian market rose by 7.5pc year on year to 419,800 b/d, with gasoline alone climbing by 9.2pc to 121,400 b/d in the period. Middle distillates increased by 6.9pc to 161,600 b/d, reflecting "an increase in consumption in border areas primarily due to a decrease in Venezuelan imports of product," as well as a change in the biodiesel blend and increased demand for jet fuel, the company said in its quarterly results released late yesterday.
Gasoline and other oil products smuggled from neighboring Venezuela used to satisfy a sizable chunk of Colombian fuel demand along the porous frontier. Colombian and Venezuelan officials have pegged the past volume at roughly 100,000 b/d. But nearly all of Venezuelan state-owned PdV's refineries are no longer operating, evaporating Venezuela's domestic fuel supply and leaving Ecopetrol to fill the gap in the border areas. Venezuelan fuel imports, which used to come mainly from the US, have been severely limited by US oil sanctions imposed in late January 2019.
Service stations in Colombian departments along the borders with Venezuela and Ecuador sell motor fuel at lower prices than in the rest of the country under a policy originally designed to discourage smuggling by reducing the differentials with subsidized fuel prices in the neighboring countries. Critics of the policy have said the policy is a perverse incentive for illegal drugs traffickers who use gasoline to process coca into cocaine for export.
The acute lack of fuel in Venezuela has begun to reverse a trickle of the contraband flow, although at prices that are out of reach for most Venezuelan drivers, according to Venezuelan and Colombian officials.
Colombia posted GDP growth of 3.3pc in 2019, compared with 2.5pc in 2018.
Migration flow
The dwindling supply of black-market gasoline from Venezuela contrasts with the flow of Venezuelan migrants into Colombia in recent years. The Colombian migration service reported yesterday that 1.78mn Venezuelans are in the country as of December 2019, including more than 1mn that are undocumented. The official tally is widely considered an underestimate. Outside of Bogota, the greatest share of Venezuelan migrants are in the Colombian border department of Norte de Santander.
