(Bloomberg) -- A fourth day of road blockades by protesting Colombian truckers has led to warnings of food and fuel shortages nationwide.
Bogotá Mayor Carlos Fernando Galán said Thursday the capital has four days of jet fuel left, and six days of regular gasoline.
Fuel distributor Organización Terpel SA asked clients to “rationalize” jet fuel in airports including Cartagena and Bucaramanga. With roadblocks also preventing other supplies from reaching markets nationwide, Colombia’s main farming lobby told Blu Radio that egg production, poultry, pork and dairy industries are impacted.
Agriculture Minister Martha Carvajalino told La FM radio station that food supplies fell by 23% on Wednesday and added that fruit, vegetables, and other perishable goods are severely hit, causing food price increases.
“Every hour puts us in a more critical situation,” she said.
The government of President Gustavo Petro is trying to phase out expensive diesel subsidies which are inflating the fiscal deficit and making it harder to finance its social spending programs. The administration raised diesel prices 20% to 11,360 pesos ($2.71) per gallon on Aug. 31.
The finance ministry says the increase will save the government $380 million for the rest of the year.
While food price inflation is already picking up, the impact depends on how long the disruption lasts, according to Munir Jalil, Andes chief economist at BTG Pactual. Nationwide protests and roadblocks during the government of President Ivan Duque pushed food price inflation above 25% in 2022.
Prolonged roadblocks may cause the central bank to maintain its pace of interest rate cuts against expectations of an acceleration over the next meetings, according to Latin America strategist at XP Investments Andrés Pardo, who estimated a 75 basis point reduction from the current benchmark rate of 10.75%. The central bank will hold its next monetary policy meeting on Sept. 30.
“If we get to the end of the month with no resolution to the truckers’ strike, we would be inclined to think that BanRep may not accelerate the easing pace,” Pardo wrote in a Thursday note, adding that the board could deliver another 50-bps rate cut.
Truckers on Wednesday rejected the government’s offer to revoke the increase of nearly 2,000 pesos per gallon, and instead increase it gradually by 200 pesos a month to reach an 800 peso increase by the end of the year.
State-controlled oil company Ecopetrol SA warned on Wednesday that its operations were being seriously hampered by a combination of the truckers’ strike, guerrilla attacks on its pipelines and an occupation by indigenous protesters of a natural gas plant.
(Updates with analyst comment starting in the 9th paragraph. A previous version of this story corrected the name of the Bogotá mayor)
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