Colombians ushered in the new year amid fresh economic challenges, with fuel and prices for everyday goods trending upward and putting pressure on household budgets. Multiple factors — from tax changes to a historic minimum wage increase — are contributing to rising costs that could shape consumer inflation in 2026.
Since January 1, 2026, fuel prices in Colombia have seen a new increase, with adjustments of 90 pesos per gallon for regular gasoline and 99 pesos for diesel, according to the Energy and Gas Regulatory Commission (Creg).
At the heart of this shift are structural tax revisions that take effect Jan. 1, 2026. Under Colombia’s updated tax framework, gasoline and diesel will begin facing a value-added tax (VAT) of 10%, a prelude to eventual alignment with the full 19% general VAT rate. Analysts warn this change may lift fuel costs at the pump and ripple across transportation and logistics sectors, which in turn affect the cost of other goods, analyzes Vatcalc.com.
Colombia faces rising fuel and goods prices in 2026 as inflation, taxes, and wage policies bite consumers
Fuel — already a sensitive driver of inflation — is now more expensive not only because of taxation policy but also amid broader price pressures. Colombia’s consumer price index has remained above target in recent months, with inflation breaking multi-month highs in late 2025 as prices for food and regulated items continue to climb, according to Focus Economics.
The government’s economic policy mix has also played a significant role. On Dec. 30, 2025, President Gustavo Petro announced a 22.7% minimum wage hike — the largest in decades — raising the monthly wage to 1.75 million pesos (about US$470). While the move was framed as a way to reduce inequality and strengthen workers’ purchasing power, according to Reuters, economists warned it could stoke inflation by increasing costs for employers and consumers alike if businesses pass higher labor costs onto prices.
In response to these inflation risks, Colombian authorities are now considering price-control measures to curb potential overheating of the economy, according to reports from Blu Radio and Investing.com. The government is evaluating decrees to deindex prices and preempt speculative behaviors that might exacerbate consumer price hikes — particularly for essential goods.
Central bank policymakers are watching these developments closely. According to recent surveys, inflation is projected to remain above the Bank of the Republic’s 3% target range throughout 2026, with some estimates suggesting it could settle near 4.5–4.6% by year’s end. Persistent inflation could eventually prompt monetary tightening if price pressures fail to abate, reports Energy Connects.
Strain on the basic consumer basket
According to BBVA Research, beyond fuel, the broader consumer basket is feeling the strain. Price pressures have emerged in food, utilities and other regulated sectors, contributing to sustained inflation that has outpaced targets for several consecutive months, according to domestic sources.
For everyday Colombians, these macroeconomic shifts translate into real cost increases. Online forum discussions and personal accounts reflect concerns about grocery prices and everyday expenses climbing in the new year, with consumers noticing higher totals during routine purchases. While these are anecdotal, they echo broader inflationary trends affecting market prices.
Business groups and economists are divided on the outlook. Some argue that higher wages could boost internal demand and support consumption, while others caution that the combination of tax changes, higher labor costs and inflation sets the stage for a squeeze on small and medium enterprises.
If enterprises adjust prices upward to maintain margins, this could feed back into inflation — potentially creating a wage-price spiral that complicates economic management.
Government and private sector dialogue on how to balance growth, equitable wages and price stability is likely to intensify in 2026, particularly with Colombia’s presidential election scheduled for May 31. Economic policy will remain a central theme, as voters assess the impact of fiscal and social measures on their cost of living.
The price-rising trend would persist
Economists expect that if current trends persist, fuel and goods prices will continue to challenge Colombian households, at least through the first half of 2026. Policymakers may lean on a combination of regulatory controls, targeted subsidies, and fiscal measures to temper inflation’s social impact, but the final outcome will depend on how quickly underlying price pressures ease.
As Colombia navigates these economic currents, consumers, businesses, and investors alike will be watching for signals from both the central bank and government ministries on policy responses and inflation forecasts that will define the coming year’s economic terrain.