## Colombia: Technical Assistance Report-Reforming Energy Pricing

_IMF Staff Country Reports, November 18, 2019_

## Source details

**Canonical URL:** [Colombia: Technical Assistance Report-Reforming Energy Pricing](https://www.imf.org/en/publications/cr/issues/2019/11/18/colombia-technical-assistance-report-reforming-energy-pricing-48819)

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## Bibliographic details
- Published: November 18, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513520629.002

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### Overview and fiscal context
- Rising fiscal challenges in Colombia can risk derailing the government from their commitment to meet both its headline deficit target of 2.4 percent in 2019 and its structural deficit target by 2022, under the existing fiscal rule.
- The government is committed to embark on a reform strategy that aims at safeguarding the fiscal framework.
- Energy subsidy reform is one element of the government’s strategy to address fiscal pressures.

### Main findings and analytical results
- Carefully designed reforms entail a gradual phasing out of subsidies in the case of fuel products and, in the case of electricity, an improvement in the targeting over the medium term.
- Illustrative simulations presented in this report highlight the fiscal and distributional impacts of different reform options.
- Simulations show that net fiscal gains could be achieved both for electricity and fuel products, while reducing distortions.
- The mission identified reform options to reduce energy subsidies while at the same time improve their targeting.
- The approach differs across sectors.

### Policy recommendations and reform design
- Gradual phasing out of fuel product subsidies to limit disruption while achieving fiscal savings.
- Improving targeting of electricity subsidies over the medium term to better align support with vulnerable households and reduce fiscal cost.
- Use of illustrative simulations to assess both fiscal and distributional impacts when designing reform packages.

### Key statistics and publication metadata
- Pages: 59
- Volume: 2019
- Issue: 344
- Series: Country Report No. 2019/344
- DOI: https://doi.org/10.5089/9781513520629.002
- Stock No: 1COLEA2019004
- ISBN: 9781513520629
- ISSN: 1934-7685

*International Monetary Fund. Fiscal Affairs Dept. "Colombia: Technical Assistance Report-Reforming Energy Pricing", IMF Staff Country Reports 2019, 344.*

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_Source: https://www.imf.org/en/publications/cr/issues/2019/11/18/colombia-technical-assistance-report-reforming-energy-pricing-48819_