How much will gasoline and diesel prices increase due to tax reform? These are the calculations made by Finance Minister Germán Ávila.

To raise 26.3 billion pesos and fully finance the 2026 General National Budget, one of the objectives of the tax reform of President Gustavo Petro's administration is to increase the VAT on gasoline and diesel.

This increase will be gradual. Starting in 2026, the rate will increase from the current 5 percent to 10 percent for gasoline, and starting January 1, 2027, it will be taxed at the general rate of 19 percent.

For diesel, the new 10 percent rate will be levied during 2026 and 2027, while the 19 percent VAT will apply starting January 1, 2028.

In an interview with EL TIEMPO, Finance Minister Germán Ávila stated that this increase in VAT would cause the price of gasoline to rise by approximately 460 pesos, compared to the current average of 15,868 pesos.

Meanwhile, a gallon of diesel would increase by 250 pesos. The current national average price is 10,685 pesos, based on Colombia's 13 main cities.

However, initial calculations by Julio César Vera, president of the Xua Energy Foundation, suggest that a gallon of gasoline will see a larger increase, of 1,783 pesos, while diesel would rise by 1,274 pesos.

For its part, the Confederation of Retail Fuel and Energy Distributors (Comce) estimates that the increase will be 2,012 pesos for gasoline and 1,295 pesos for diesel.

This higher price not only takes into account the increase in VAT to 19 percent, but also the 94 percent increase in the carbon tax and the addition of VAT to ethanol, a biofuel that is mixed with gasoline.

These additional increases are also part of the tax reform that President Gustavo Petro's administration submitted to Congress on September 1.

In addition to the increase in fuel prices, the Minister of Finance acknowledged that these higher taxes will have an impact on inflation, although it will be "small."

Gasoline inflation is estimated to be around 0.25 points, and diesel inflation, 0.19 points. "It's a very small marginal impact that won't have significant inflationary impacts," he added.

He also believes that the impact of the gasoline price increase on low-income households will be "very small," since fossil fuel use doesn't even represent 2 percent of the family basket expenditures of the poorest sectors.

eltiempo