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Colombia Raises Gas Prices, Citing Pipeline Attacks

June 24, 1989

BOGOTA, Colombia (AP) _ The government raised gasoline prices 10 percent Saturday and blamed the increase on Marxist guerrillas whose two-year sabotage campaign has cost the oil industry $375 million in lost export revenues.

Union leaders said the move would increase inflation. One opposition politician said the government should halt terrorism, not raise prices.

The increase boosted the average price of regular gasoline from 195 pesos (52 cents) to 215 pesos (57 cents) a gallon, and premium gas from 243 pesos (65 cents) to 267 pesos (75 cents). The minimum wage is 32,000 pesos ($85) a month.

″There was no other alternative left to avoid depriving the government of the resources needed to pay for social programs,″ Energy Minister Oscar Mejia Vallejo said in a nationwide television broadcast announcing the increase.

Colombia’s rich eastern oil fields are jointly operated by the state-owned conglomerate Ecopetrol, which holds 50 percent of the shares, and Occidental and Dutch Shell, which control 25 percent each.

Since the guerrillas of the National Liberation Army began their sabotage campaign, the oil industry has reported 104 terrorist attacks.

The guerrillas want the government to nationalize the assets of Occidental and Dutch Shell and have said the attacks on oil pipelines will continue until the government allows a public debate on nationalization.

Earlier this week, Comptroller General Rodolfo Gonzalez said he favored a dialogue with the guerrillas that would include ways of improving the revenues Colombia receives from its partnership with Occidental and Dutch Shell.

Mejia Vallejo estimated export revenue losses at $375 million since the guerrilla attacks began two years ago, just as Colombia began exporting oil.

The latest and most devastating dynamite attack knocked out the pump station at Covenas port on June 16, halting daily exports of 200,000 barrels.

Repairs are not expected to be completed until at least mid-July.

Most of the guerrilla attacks have occurred on the 487-mile pipeline between oil fields in Cano Limon, near the Venezuela border, and Covenas port.

About 420,000 barrels of oil have spilled over the mountainous region since the guerrilla attacks began, according to Mejia Vallejo.

Several union leaders said Saturday the increase in gasoline prices will worsen inflation, already running at an annual rate of 13.6 percent.

Another critic was Bogota Mayor Andres Pastrana, of the opposition Conservative Party. ″Impotent before terrorism, the government has decided to pass on to the Colombian people the cost of this madness,″ he said.

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