Colombia records 55.5% energy price surge, second-highest in Latin America as mining tax contribution collapses

The mining and quarrying sector’s contribution to corporate income tax revenue collapsed from more than one-third of collections in 2012 to barely 6% in 2025, according to data presented by ANIF and the Centro de Estudios Energéticos at a seminar in Bogotá this week. While Colombia’s GDP expanded 37% between late 2013 and late 2025, the mining and quarrying sector contracted nearly 30% over the same period. José Ignacio López, president of ANIF, stated that with public finances at one of their tightest moments, the country cannot afford to lose a revenue source that once supplied more than a third of corporate income tax. CREE, led by former Minas y Energía minister Tomás González, calculated that to maintain constant tax revenue, the economy would need to generate an additional COP 2.8 in other sectors for every peso lost from hydrocarbons GDP, a target it described as impossible to meet in the short term.

The production decline stems from three factors: prior-government policies that banned new exploration and production contracts, raised sector taxes repeatedly and attempted to veto fracking, driving out investors including Exxon; geological depletion of mature fields such as Chuchupa in La Guajira, which peaked in 2010 and now represents just 1% of national gas output; and an absence of major discoveries since the 1990s. Proven gas reserves fell 17% year-on-year by the end of 2025 to 1.717 trillion cubic feet, the lowest level in 18 years, according to the Agencia Nacional de Hidrocarburos.

The production collapse has forced Colombia into external dependence. Gas imports rose from near zero to 30.8% of supply as of July 2026, and CREE estimates that without new domestic sources, import reliance could reach 100% within the next decade. Natural gas prices accumulated a 36% increase between 2022 and 2024, and around 18% of gas consumed in 2025 was imported, with the projection for 2026 exceeding 32%. The Climate Prediction Center gives more than 90% probability to a very strong El Niño event in the final quarter of 2026, and Colombia’s IDEAM forecasts 69% probability of very strong intensity between October and December. XM reported reservoirs closed August 2026 at 79.36% of useful capacity, but river flows feeding the dams reached only 74.46% of the historical August average, the fourth consecutive month below the mean.

Acolgen estimates a 7.8% energy deficit for 2027, and a Lumen Economic Intelligence study presented at its annual congress projects that severe rationing similar to the 1992 episode would cost the country around COP 30.7 trillion, approximately 1.6% of GDP, and put up to 210,000 jobs at risk. The 55.5% rise in electricity, gas and fuel prices since the pre-pandemic period represents the second-largest increase in Latin America, behind only Chile’s 71.5% jump, with the impact concentrated in manufacturing activities where energy weighs heavily in cost structures.