When Gustavo Petro became Colombia’s president in August 2022, he vowed to halt new exploration for hydrocarbons and phase out subsidies to fossil fuels to take the country into its net-zero future, and balance the budget along the way. 

That was a bold move. Worldwide, Colombia is the only major oil producer that has taken such a measure. It stands in stark contrast with anything that is happening in its own neighbourhood. In Brazil, president Lula da Silva wants to drill for oil in the Amazon; in Guyana, president Irfaan Ali frames talks of sustainability as a post-colonial lecture from the west; in Venezuela, there is no way out from the Dutch disease that has gripped (and ruined) the country. Further north, in Mexico, oil and gas is front and centre of president Andrés Manuel López Obrador’s development strategy. 

So far, Mr Petro has walked the walk. Almost two years into his presidency, no new exploration deal has been signed. How has his energy transition vision panned out? 

Unequal growth 

Despite falling reserves, Colombia still features among the world’s top 25 largest oil and gas, as well as coal, producers. They generated almost half of Colombian exports since the turn of the millennium and have accounted for between 10% and 20% of central government revenues, official statistics show. 

However, the wealth thus generated has struggled to trickle down to the benefit of all Colombians, argues Hector Fuentes, professor of economics at the Universidad Distrital in Bogotá. 

“We found out that there is no direct correlation between the mining and oil output and wealth distribution, poverty rates and human development,” he says.

Colombia is the third most unequal country in the world, World Bank figures based on the Gini index show. Only South Africa and Namibia fare worse than Colombia. 

Alternatives needed

Mr Petro’s decision to halt new exploration licences for hydrocarbons resources has drawn direct criticism from the Colombian oil and gas industry. Others, inside and outside the country, agreed on principle, but highlight the risks it engenders. 

The administration’s goal of reducing dependence on oil and coal “is commendable”, wrote the IMF in March, while warning about a “disorderly transition towards cleaner energy”. 

“Where will that dependency on oil be in 10 years? The danger is that the country is actually going to import hydrocarbons,” points out Robert Munks, head of Americas at risk consultancy Verisk Maplecroft.  

These criticisms all point to a lack of an alternative. The government has yet to produce an official roadmap for its ‘just energy transition’. On the supply side, a big pipeline of renewable energy projects is indeed building up, but is facing many  implementation challenges. On the demand side, the idea is to push the electrification of mobility as much as possible, but proposals to develop electric vehicle production platforms with Venezuela and Bolivia feel far-fetched. 

The government still believes that the energy transition has time to run its course, explains trade, industry and tourism minister German Umaña. Mr Umaña points out that there are hundreds of oil and gas exploration wells that continue to be drilled (the ban on explorations leave existing licences untouched) and believes that the lifespan of proven reserves can be roughly doubled, giving the country a total of 15 to 20 years. 

Fuel subsidies 

On the subsidies front, Mr Petro won greater consensus among domestic and international observers. The IMF described as ‘exemplary’ the removal of gasoline subsidies in 2023, and asked for similar action on diesel subsidies, which remain in place. Opposition parties offered him a rare olive branch too. 

The measure did not go down well with the wider population, however. In a country where public transport is relatively underdeveloped — Medellin’s rapid transit system is a celebrated success, but capital city Bogotá remains one of the few megacities in the world without an underground transport system — and most private vehicles run on gas and diesel, hikes in fuel prices matter. Since he came to power in August 2022, the price of gasoline has increased by more than 66%. 

Even worse, fuel price inflation is known to be regressive, as poorer people end up spending disproportionately higher parts of their incomes on transport. Under Mr Petro’s plan, they will get it back through the social plans financed with the budgetary savings achieved. But in the meantime, people took to the streets to voice their dissent and further sink the president’s approval ratings.  

Despite sustainability dominating the public discourse, Colombia shows that pivoting away from oil and gas is easier said than done. Ultimately, Mr Petro’s transition plan is for the long term, but it will have to survive the short term to live up to its ambitions. At the moment, that is not a foregone conclusion.

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